To cushion the domestic economy from the impact of the increasing weakness in foreign economies and the less accommodative conditions in U.S. financial markets, the FOMC, beginning in late September, undertook three policy easings. By mid-November, the FOMC had reduced the federal funds rate from 5½ percent to 4¾ percent.
The rand’s exchange value has reflected investor concerns in recent weeks, and although the negative consequences of the unrest cannot be underestimated, I am confident the currency will return to more appropriate levels.