We have and continue to concentrate on building our reserves gradually and sensibly to a level that could be regarded as appropriate for a small open economy such as South Africa. Of course, we also have to bear in mind the costs of accumulating reserves. The appropriateness of reserve levels will also change over time.
Just as we were not able to plow the streets in 1996 or deliver packages in 1997, the central bank will be unable to reprogram the nation’s computers for the year 2000. The Y2K problem is primarily an issue affecting the aggregate “supply” side of the economy, whereas the Federal Reserve’s monetary policy works mainly on aggregate “demand”.