An analysis of the capital account in South Africa's balance of payments, 1960 - 1977

Abstract

Recent developments in the capital account of South Africa's balance of payments have giyen cause for concern about the capital account and the appropriate policies that should be implemented to protect the level of South Africa's foreign exchange reserves. These developments have contributed to the appointment of a Commission of Inquiry into the Monetary System and monetary policy in South Africa, and an interim report on exchange rate policies is expected in November, 1978. This study, which was inspired by the lively debate on this issue, is an attempt to analyse the general trends in the capital account particularly those related to the supply of foreign capital, the exchange control policies of the authorities to protect the capital account from sudden adverse fluctuations, and the determinants of flows of foreign capital.