The real story behind the new demand management?
As the saying goes, if it looks like a duck and quacks like a duck then it is probably a duck. The balance of payments for the second quarter were published recently and as I suspected it is another quarter of a relatively deep negative current account balance. This explains the central banks renewed zeal for protecting the economy from imports and its cocktail of demand management policies. Of course the best way to close balance of payments problems is by exchange rate adjustments, because trying to collapse imports typically has the unintended side effect of collapsing the economy. But more on that some other time.