Ideally, what we would like to see is an appropriately valued stable exchange rate, one that is not a significant issue for inflation. However, that is in an ideal world. In reality, the exchange rate is buffeted by a number of fundamentals which require adjusting to; in South Africa’s case, these fundamentals include commodity-price changes and capital flows.
Over time, we have learned the hard way that trying to ‘lean against the wind’ in the face of markedly changing fundamentals can be both futile and expensive, and any success in this respect is likely to be short-lived at best. That is not to say that we will never get involved, particularly in the event of liquidity drying up in the market.