PART I: SUMMARY OF MONETARY POLICY MEASURESThe task of the Reserve Bank is to protect the value of the South African currency. In order to achieve this objective the domestic inflation rate must gradually be brought more in line with the average rate of inflation in the country's major trading partners and major international competitors. In order to achieve this objective, the Bank has adopted an eclectic approach to monetary policy in which recognition is formally given to a medium to longer-term stance of monetary policy. In this approach, developments in a few selected financial aggregates will be monitored as a basis for monetary policy decisions. In applying this policy the Bank will strive to: 1. bring the domestic inflation rate down to a level more in line with inflation in the economies of South Africa's major trading partners which now fluctuates between 1 and 5 per cent per year. This cannot at this stage be accepted as an official or firm inflation target for South Africa, but it provides an important economic guideline when monetary policy decisions aimed at longer-term objectives are taken;2.  achieve an average rate of growth in the broadly-defined money supply (M3) of between 6 and 10 per cent per annum. Such growth rates are regarded as consistent with acceptable objectives for the rate of inflation and the potential real rate of growth in the economy. The growth in money supply is still regarded as a vital element in containing inflation, and the Bank will continue to announce money supply guidelines, but a more medium to longer-term approach is now adopted; and3. restrict the rate of increase in total bank credit extension to not much more than 10 per cent per year in order to realise the money supply guidelines.As a result of the growing complexity of functional relationships between the various financial variables, the Bank will also closely monitor developments in other financial indicators. To obtain overall financial stability, all the major financial aggregates should change within a consistent and sustainable framework.As already announced, the Bank will introduce more flexible accommodation procedures for banking institutions on 9 March 1998. From this date banks will be offered the opportunity to tender on a daily basis for a fixed amount of central bank funds through repurchase transactions. In addition, a marginal lending facility will replace the current system of collateral loans at Bank rate, where overnight loans or loans for a few days will be provided to banks at the marginal lending rate. To guarantee orderly conditions in the changeover from the old to the new system, the Reserve Bank has decided to:1.  fix the repo rate at 15 per cent from 9 to 13 March 1998. This will reduce the effective cost of borrowing from the Reserve Bank by one percentage point. From 16 March 1998 the Bank will only announce a maximum amount for the daily tender of repos, and the average rate will be determined through the tender mechanism; and2. fix the marginal lending rate at 16 per cent, that is at the level of the old Bank rate, for at least two weeks as from 9 March 1998. This rate will be reconsidered after two weeks in light of the experience with the new repo system. A new averaging provision will be introduced in the application of the minimum cash reserves that banks have to maintain at the Reserve Bank from 20 March 1998. To simplify the current cash reserve requirements, the Reserve Bank has decided to apply only one reserve ratio of 2½ per cent on the total liabilities (as adjusted) of banks, beginning from the maintenance period starting on 23 April 1998. This will slightly reduce the amount of the minimum cash reserves, but no interest will be paid on any part of the minimum cash reserve balances.The Reserve Bank has also decided, from time to time, to issue Reserve Bank debentures for the management of bank liquidity. The issue of these debentures will partially compensate banks for the loss of interest that they currently earn on part of their cash reserves, and will establish a role for R