Daniel Mminele: Managing capital flows - challenges for developing economies

Remarks by Mr Daniel Mminele, Deputy Governor of the South African Reserve Bank, at the "Managing Capital Flows: Challenges for Developing Economies Conference", Livingstone, Zambia, 5 May 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Good afternoon, ladies and gentlemen.

Let me start by thanking the International Monetary Fund (IMF) for inviting the South African Reserve Bank to be a part of this conference - and in these rather spectacular and splendid surroundings. As many of you will know, the Victoria Falls next to us were declared one of the seven natural wonders of the world. Luckily, the issues we have been asked to address today do not leave us at the mercy of nature, but are rather about the choices we need to make to ensure that we harness the good that comes with international capital flows while managing the risk of damage that they admittedly may cause under certain circumstances.

1. Introduction

In this session, we have been asked to provide some concrete advice to policymakers in light of what has been discussed during the course of the day. When I read this, I was reminded of an old Zambian saying: "One who enters the forest does not listen to the breaking of twigs in the bush." This speaks to remaining focused on one's particular task despite what one may see or hear in the process of the quest. Unfortunately, when it comes to providing advice on managing capital flows, one tends to hear many twigs breaking. This is a complicated task. Any piece of advice cannot be based on generalisations or extrapolations as country-specific factors and features of the financial system, as well as the time at which measures are considered, are of critical importance.