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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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This is the state of the Reserve Bank's forward book in the foreign currency market. In the past, the Reserve Bank ran a substantial deficit on the forward book which reached as much as US$25bn in 1995. That negative position was the result of the futile efforts to try to defend the falling rand in the currency futures market. That net open forward debt was eliminated in March 2003. In general the only time that the Reserve Bank intervenes in the currency market is to buy foreign currency to bolster reserves. For that reason, the net open forward position (NOFP) is either neutral or positive. Daniel Mminele wrote an excellent note on the Reserve Bank's history of involvement in the currency market which is available at: <a href="https://www.bis.org/publ/bppdf/bispap73x.pdf">https://www.bis.org/publ/bppdf/bispap73x.pdf</a>

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