South Africa as an open economy and engaged in trade may be susceptible to foreign economic shocks. Europe, a foremost trading partner, due to the current RussiaUkraine war, might realises a major economic recession culminating into a decline in income. Based on this, discuss with the aid of a diagram how the current South African exchange rate regime would protect the country's economy from economic shockwaves that may originate abroad. Additionally, provide also a summary perspective of what would happen if the country operated under a fixed exchange regime. 

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Figure 10-48 Interest rate scenarios Scenario 30 Year Fixed 20 Year Fixed 15 Year Fixed 10 Year Fixed 2014 Cengage Learning Interest Rate 3.625% 3.250% 2.625% 2.375% Years 30 20 15 10 Loan $250,000 $250,000 $250,000 $250,000 Figure 10-48 Interest rate scenarios Scenario 30 Year Fixed 20 Year Fixed 15 Year Fixed 10 Year Fixed 2014 Cengage Learning Interest Rate 3.625% 3.250% 2.625% 2.375% Years 30 20 15 10 Loan $250,000 $250,000 $250,000 $250,000

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