In an increasingly global economy, where barriers to trade and financial flows among nations have tended to be reduced since the early 1970s, policy-makers must be ever vigilant in ensuring that their country’s balance of payments and exchange rate evolve in ways that create the possibility of expanded and sustained economic growth and development. In modern economies linked by virtually instantaneous and twenty-fourhour flows among the world’s financial markets in London, Paris, Frankfurt, Tokyo, Hong Kong, Seoul, Sydney, Mexico City, Buenos Aires, Toronto and New York, disequilibrium situations that are not corrected fairly quickly can lead to severe crises over the longer term.