The policy implication is unproblematic for South Africa, as causality is Bidirectional, running from the Rand/USD and Rand/Euro to JSE-ASI and vice versa; and uni-directional relation from domestic stock prices to the exchange rate of British Pound Sterling
(Rand/GBP) and from exchange rate of Japanese Yen (Rand/JPY) to domestic stock prices respectively.
For example, in 1992, George Soros and other speculators attacked the British pound sterling
, and successfully "broke" the Bank of England -- which early in the 20th century had been the world's most powerful central bank.
In the immediate aftermath of the Brexit vote, the British pound sterling
hit both a six-month high and a six-month low within the same day-peaking at over $1.50 per pound when the 'Remain' vote was widely thought to have prevailed, then plunging below $1.35 when 'Exit' suddenly emerged the winner.
But Soros said recent strength in the British pound sterling
was a sign that a vote to exit the EU is increasingly less likely.
The most direct notable impact could come from a drop in the exchange rate of the British pound sterling
vis-a-vis the euro, while further side effects in the form of political uncertainty in Europe cannot be ruled out, they said.
"In our view, monetary flexibility remains a key credit strength owing to the British pound sterling
's role as a global reserve currency."
Under the new rate structure, a five-year dollar deposit will earn an NRI1.71 percent interest, as against the previous 1.77, while the same for the British pound sterling
will be 2.56 percent, as against 2.65 percent earlier.
"With this, the rupee will join the select club of currencies, such as the US dollar, British pound sterling
, euro and Japanese yen that have a clear distinguishing identity, he added.
People in Newry, in County Down, have always dealt in both the Irish punt and the British pound sterling