As indicated, financial conditions became more stable from the fourth quarter of 1998. General nervousness continued to prevail among international investors, and they withdrew funds from emerging-market economies whenever there were signs of any pressure on exchange rates. In these circumstances, the Reserve Bank deemed it prudent to guide the repo and other money market interest rates gradually down to lower levels.
The impact of globalisation on retirement funds comes from enhanced competition, raised mobility of factors of production and a greater need to diversify portfolios globally. Given the improved sophistication of local institutional investors in managing foreign assets, it is therefore understandable that the local retirement fund industry is calling for a greater opportunity to place offshore investments.