With the adoption of the inflation targeting framework, it also became the stated objective of the Reserve Bank to reduce the NOFP because of the negative effect that this position had on foreign investments into South Africa and the assessment of domestic economic conditions of international rating agencies.
The NOFP was accordingly reduced from the peak oversold position of $ billion at the end of September 1998 to an overbought position of $ billion at the end of July 2003. The Reserve Bank then shifted its focus to reducing its oversold forward book and to gradually strengthen the official foreign exchange reserve position.