So, for example, when inflationary pressures were strong we judged that there was a need for the exchange rate to appreciate somewhat in order to reduce the prices of imports and exportables. And vice versa. The financial markets understood this approach, and as a result the exchange rate tended to move very much in line with the need to keep inflation on target.
Increasing volumes of trade and cross-border investment have raised the standard of living in many emerging countries at an astonishing rate. Trade and foreign investment have moved the countries of southeast Asia in less than a generation from traditional agriculture to modern industrial societies with far less poverty, much more skilled work forces and rising standards of living.