In South Africa it is estimated that it takes between 18 and 24 months for a change in shortterm interest rates to fully impact on the rate of increase in consumer prices. In 2002 the rate of increase in the CPIX averaged 9,3 per cent, or 330 basis points above the upper limit of the target.
Nevertheless, we also believe that some type of umbrella supervision will be necessary to protect insured depository institutions and address systemic risk concerns. Whoever plays that role should take a broad perspective in evaluating risks not only to specific depository institutions but also to the payment system and to the broad financial industry as well.