This particular piece of our economic structure helps the economy adapt to shocks in international capital markets more effectively than the alternative, of a fixed exchange rate, would allow. That flexibility is not without limit, of course, and needs to be complemented by an effective monetary policy strategy to provide an anchor for the system – which is where inflation targeting comes in.
So a number of factors have assisted the economy in coping with the external shock. Can this good performance continue? To state the obvious, it depends how long the international economy remains weak. No economy can remain insulated from global problems indefinitely.