The effect of the higher commodity prices on the nominal exchange rate at any point in time will depend on the expected sum of these different flows into the future. Also, there may be offsetting reductions in inflows to other sectors of the economy, particularly those adversely affected by the appreciation of the exchange rate.
Clearly, determining this sum is no easy task and is subject to considerable uncertainties. 7  For a discussion of the impact of the mining boom on cross-border financial flows, see Debelle G (2013), “Funding the Resources Investment Boom”, Address to the Melbourne Institute Public Economic Forum, Canberra, 16 April.