*  *  Introduction and context  Global economic rhythms remain disturbed and economic policies of major advanced economies are moving in different directions. Much of the emerging market universe is experiencing weak economic growth and higher than comfortable inflation.
US policy is slowly normalising, while Europe is taking strong remedial action in an attempt to address extremely low inflation and a protracted recession. These developments, and others, will continue to affect South Africa and test our policies. This has already been a challenging year for the Reserve Bank. We have seen a sustained breach of the inflation target.