Question
Read the case study below and answer the question that follows. Towards the end of 2009 the pound fell to a six-month low of 1.0628
Read the case study below and answer the question that follows. Towards the end of 2009 the pound fell to a six-month low of 1.0628 Euros. Figures released by the UK government suggested that demand was still low in the country. The pound was also under downward pressure because of the low value of the interest rate. A recent report suggested these would remain at their historic low of 0.5% until 2014. Business confidence in general remained frail and there was concern over when the UK economy would start to recover from its negative growth. There was huge excess capacity in the UK. In addition, the government had a huge deficit which was expected to cause problems with cutbacks and tax increases in the future. Required:
Question: Analyse the possible effects on the South African economy of a fall in the value of the currency
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