Otherwise these policies destabilising capital flows would inevitably undermine the exchange rate. ... The result was large devaluations of the exchange rates of these countries, especially against the US dollar; large interest rate increased to support the exchange rates at their new lower levels (to prevent wholesale over reaction and collapse in foreign exchange markets and to help contain the strong inflationary forces thus set in motion); and extra restrictions in fiscal policy designed to raise national saving, contain domestic spending and reassure foreign investors and international in...

• Word Count: 2133
• Approx Pages: 9
• Has Bibliography
• Grade Level: Undergraduate

Relative economic performance was beginning to deteriorate. but a strong gold price shielded policy makers from this reality. ... If handled well and in a fiscally responsible manner, the programme will go some way towards meeting expectations and providing a necessary stimulus to growth. ... The longer-term policy objective is to bring South Africa's inflation rate down to the same level as that of its trading partners. Since 1989 good progress has been made in combating inflation through restrictive monetary policies. ... This was due to the natural modernisation of the economy, a...

• Word Count: 6046
• Approx Pages: 24
• Grade Level: Undergraduate