This normally entails raising rates sharply and selling reserves, which suppresses output, exacerbates local debt problems and often fails anyway, especially when speculators bet against the fixed exchange rate. Furthermore, an overvalued exchange rate in the context of a current account deficit just exacerbates the problem, because imports are unrealistically cheap and exports are penalized. The rand, however, is a free-floating currency.
This liberates us from vain or harmful attempts to manage its value, and ensures that there is liquidity in the foreign currency market at all times. Depreciation also provides the right incentives to producers and consumers of tradeables. The floating rand acts as a shock-absorber for the South African economy and is one of our best defences against a sudden stop.