Besides, it is essential not to adjust policy to temporary trends: part of the current pressure for the appreciation of emerging currencies relates to commodity prices (through the current account) and the investors’ risk appetite (through the capital account), which may clearly be temporary instead of permanent forces. Against this backdrop, it would be wrong to adjust monetary policy to these forces.
Mr. Stals looks at the effects of the changing financial environment on monetary policy in South Africa Address by the Governor of the South African Reserve Bank, Dr. C. Stals, at the Annual Dinner of the Pretoria branch of the Economic Society of South Africa held in Pretoria on 15/5/97. 1.