As a result, capital was not always channelled into its most productive use, and in various countries this fostered an unsustainable asset price increase that led to high private-sector debt and excess domestic demand; the housing markets in several advanced economies are a prominent example. These undesirable developments were further encouraged by loopholes and weaknesses in the regulatory framework.
And the advantages are not limited to commodities. Rand depreciation makes the tradeables sector more competitive, creating the right import and export incentives – which are especially important in the context of substantial current-account deficits.