When we floated our exchange rate in 1950 and again in 1970, it was because we were pushed off our pegged rate by the pressures of rising commodity prices and associated strong inflows of capital. The notion of a national monetary policy with an independent inflation target did not feature in these decisions.
As we now see it, a floating exchange rate plays two key roles. In the first place, in the long run a floating currency allows the central bank to pursue a national inflation target, regardless of the behaviour of foreign inflation.