Investor doubt about the strength of our macroeconomic framework contributed to higher borrowing costs as well as exchange rate weakness, with the rand becoming one of the world’s worst-performing currencies. The depreciated currency was, of course, a major reason why inflation forecasts began indicating prolonged breaches of the top end of our inflation target range.
The Reserve Bank also issued the Banking Supervision Policy Statement Number 17: Interest Spread Disclosure Statement and this requires commercial banks to publicly disclose any increase in interest rate spreads beyond the previously regulated limit of 4 percent for any given quarter. In addition to disclosing the actual interest rate spread, the bank will also be required to disclose the specific reasons.