No doubt, the policy makers have to encourage the real sector to change and become more and more flexible to cope with the exchange rate dynamics. At the same time, the pressure for change cannot be to such an extent that the volatile exchange rate movements seriously disrupt the business environment.
Fourthly, there is a problem in differentiating between the flexibility and the volatility in exchange rates, in view of the evolving situation in EMEs. The distinction has to be based on the preparedness of the markets and the market participants.