It is amazing to read in the financial press in South Africa almost every day the accusation that the high interest rates in South Africa at this stage are a reflection of the Reserve BIS Review 68/1998  -3-  Bank’s deliberate “high-interest-rate-policy”. The present level of interest rates is often described as being “artificially” high because of Reserve Bank intervention in the market.
Also, the rules under the Stability and Growth Pact must be tightened. The experiences with the Greek fiscal deficit have made this painfully clear. The badly-hit financial sector faces a fundamental adjustment over the next few years. It is in everyone’s interest that the sector emerges stronger from this process.