Thus, we have received the effects on our trade flows quite early in the piece. In time, when their exports pick up, we should get some benefit from this even if their domestic demand remains weak. 5. How have we coped?
To date, we have coped quite well, largely because we were in good shape going into it with strong domestic demand and low inflation. This was in part due to the fact that we had taken expansionary monetary policy action between July 1996 and July 1997. The other way in which we have coped well is that our financial markets have behaved very sensibly.