Firms in various industries are becoming increasingly decisive in disposing of the “negative legacies” inherited from the “bubble” economy in their accounting-year-end settlement in March 1999. These moves can be taken as indicating firms’ determination to launch drastic restructuring, and the Bank considers them as a necessary step for reviving the economy.
Of course, there is some hope that the rising exchange rate might discourage the capital inflows (the textbooks say that it should), although I have little faith that this mechanism will work at all smoothly, and there is too much evidence of herd and euphoria behaviour to give me any confidence that flexibility in the exchange rate will be an effective break on the sorts of capital inflows which you may well see within a few years.