Given that Chile is a major competitor of South Africa in the European fruit market in particular, these developments are seen to give our fruit farmers a significant competitive advantage. It is sometimes argued by some commentators and researchers that a weaker exchange rate is in the long-term interest of the export sector. This is a fallacy.
Yet, this research will yield insightful answers to the question of how monetary policy should respond to a buildup of financial vulnerabilities, if at all.11 The second avenue is to strengthen our framework for macroprudential policies, which are better suited to target financial system risks.