STATEMENT BY TITO TITUS MBOWENI, GOVERNOR OF THE SOUTH AFRICAN RESERVE BANK ("THE BANK") IN CONNECTION WITH THE AUTONOMY AND OBJECTIVES OF THE BANK AND THE MACROECONOMIC DEVELOPMENTS IN SOUTH AFRICA DURING 2001 AND DEVELOPMENTS IN THE FOREIGN EXCHANGE MARKET DURING 2001. TABLE OF CONTENTSINTRODUCTION AND INSTITUTIONAL FRAMEWORK PART ONETHE AUTONOMY AND OBJECTIVES OF THE BANKTHE ROLE OF THE BANK IN THE FOREIGN EXCHANGE MARKETPART TWOMACROECONOMIC DEVELOPMENTS IN SOUTH AFRICA DURING 2001INTRODUCTIONDOMESTIC INCOMEDOMESTIC SPENDINGSpending by householdsSpending by governmentCapital spendingExcess spending over income CURRENT ACCOUNT OF THE BALANCE OF PAYMENTSMerchandise exportsGold exportsMerchandise importsNet payments for services FINANCIAL ACCOUNT OF THE BALANCE OF PAYMENTSDirect investmentPortfolio investmentOther investment OVERALL BALANCE OF PAYMENTSEXCHANGE RATE MOVEMENTSCONCLUDING OBSERVATIONSPART THREEDEVELOPMENTS IN THE FOREIGN EXCHANGE MARKET DURING 2001INTRODUCTION TO PART THREEBACKGROUNDREDUCING THE NET OPEN FORWARD POSITIONEXCHANGE CONTROL LIBERALISATIONTHE IMPACT OF GLOBALISATIONCURRENT ACCOUNT OF THE BALANCE OF PAYMENTSRISK AVERSIONPOSSIBLE FURTHER FACTORS CONTRIBUTING TO RAND WEAKNESSSPECULATIVE ACTIVITYIntroductionResidentsAuthorised dealersImporters and exportersNon-residents EVENTS SURROUNDING THE 14 OCTOBER 2001 STATEMENT BY THE RESERVE BANK AND CULMINATING IN THE JOINT STATEMENT ISSUED ON 21 DECEMBER 2001CONCLUSION