The FOMC has not been basing its decisions solely on the incoming flow of economic data; for example, the sequence of interest rate cuts was initiated last fall even though growth in the gross domestic product had been quite strong in the third quarter.
Not only did the liberalisation of the markets bring greater competition for the traditional domestic South African banks, but they were also more exposed to the vicissitudes of volatile international capital movements. Our banks were forced to adopt a more open and global attitude in the daily management of their activities.