The real exchange rate (RER) has also dropped in the past few months, and is now at 94 using the 1986=100 index, which puts it on its average of the past fifteen years. While this figure is consistent with the estimated long-term RER, the cyclical conditions of the economy point to a level somewhat above its current values. For this reason, the baseline scenario uses as a working assumption that the RER will have a slight depreciation in the projection horizon (figure 7). The widening of output gaps will also help in the process of inflation convergence. They are still relatively bounded, however, and inflation’s elasticity to the output gap is low. Thus, at least in the context of slow growth and a gradually adjusting labor market, no fast reductions are expected in core inflation as a result of this factor. Chile’s economic slowdown cycle of recent years is associated with several elements. The end of the commodity super-cycle has resulted in a fall in mining investment and production. The world economy has not rebounded as expected, global financial conditions facing emerging economies have tightened and local confidence levels have remained pessimistic for quite some time. This scenario has prompted a major change in relative prices. Since indexation is still high, for the economy to adjust gradually, exchange rate flexibility is needed together with domestic financial conditions aligned with the new scenario. The Central Bank has contributed to this adjustment with an expansionary monetary policy and accommodating a sharp depreciation of the peso.

More than 20 global FIs have set up innovation centres here. You would have seen during the Innovation Lab Crawl earlier this week some of the exciting things they are experimenting with: digital health solutions tapping on wearable devices; telematics for motor insurance; blockchains to streamline payments; big data to produce customised service offerings. MAS itself has set up an innovation lab – called Looking Glass. It aims to: spur collaboration among MAS, FIs, start-ups, and technologists; and facilitate consultations for start-ups by industry experts on legal, regulatory, and businessrelated matters. Infrastructure for Electronic Payments: UPOS, CAS We have a world-class infrastructure for electronic payments. It is a 24/7, real-time inter-bank fund transfer system. We call it FAST; short for Fast and Secure Transfers. But FAST is grossly under-utilised and Singapore is still heavily dependent on cash and cheques as means of payments. The Association of Banks in Singapore is working on two key initiatives to make electronic payments seamless and convenient for everyone. First, a Central Addressing Scheme (CAS) that will allow you to pay anyone using that person’s mobile number, national ID number, email address, or any other social media address, without the need to know the recipient’s bank or bank account number. Second, a Unified Point-of-Sale (UPOS) terminal that will allow a merchant to accept all major card brands, including those that are contactless or embedded in smartphones. A National KYC Utility Knowing the identity of a customer – or KYC – is one of the biggest pain points in the financial industry.