It is also complicated by the fact that normalisation in the advanced economies is likely to be unsynchronised, with further loosening expected in Japan and the Eurozone, while the Bank of England has indicated that the first policy rate increase could already occur later this year, but at a moderate pace.
Over the period under review, the South African economy faced a very challenging environment against this global backdrop, with domestic issues compounding these difficulties. The exchange rate moved broadly in line with a number of emerging-market economies in response to tapering and capital-flow reversals.