samchain/econo-pairs-v1 huggingface dataset:
A credible central bank, where inflation expectations are anchored, will experience a smaller pass-through coefficient from the exchange rate to inflation. This allows the central bank to respond with more flexibility to shocks requiring a real exchange rate depreciation. To summarize, if there is confidence in the central bank’s anti-inflationary commitment, the central bank can react more flexibly to various shocks and, in this way, minimize deviations of output from its potential level. The central bank can smooth the business cycle while preserving price stability. The key element in this strategy is the credibility of the central bank’s commitment to price stability, for which communication and transparency are crucial. Autonomy and transparency Autonomy means that the State delegates to the central bank the administration of monetary policy, such that it be applied using technical criteria and with a medium-term horizon. Here is the first reason why central banks must be transparent: to preserve the legitimacy that an autonomous institution must have in a democratic regime, particularly one whose decisions have important implications on the nation’s well-being. Autonomous institutions must properly inform the country of their actions. In Chile, the delivery of information is determined in the Basic Constitutional Act, which establishes that, once a year, the Bank must inform the President of the Republic and the Senate about the general policies and regulations it dictates in exercising its mandate.

Former Governors, former and current Board members, as well as a great contingent of excellent economists and professionals have contributed to the design of monetary policy, a better understanding of our economy, and to administering an institution to which the country has entrusted great responsibility and to which we have an enormous obligation of excellence. Thank you very much. 4  BIS Review 156/2009  Table 1 Evolution of the central banks' autonomy index and inflation (*) I. Late 1980s Autonomy index Political Economic  Average inflation (1989)  Economies Advanced Emerging Developing  5.3% 18.6% 22.5%  0.39 0.27 0.27  Total 0.59 0.38 0.45  0.48 0.32 0.35  II. 2003 Average inflation (1989)  Economies Advanced Emerging Developing  Autonomy index Political Economic  2.1% 7.0% 8.4%  0.74 0.47 0.29  Total 0.81 0.75 0.67  0.77 0.61 0.48  (*) Countries with annual inflation above 100% were deleted from the sample. Sources: Arnone et al. (2007) and IMF. Figure 1  Drop in inflation and change in the autonomy of the central banks*  % drop in inflation  -0.2  -0.1 0  0.2  0.4  0.6  -0.3 -0.5 -0.7 -0.9 -1.1 Change in independence index  (*) Drop in inflation corresponds to the percent variation of average inflation between periods 1980-1989 and 2000-2008. Change in the independence index corresponds to the change in Arnone et al. (2007)'s autonomy index between the late 1980s and 2003. Sources: IMF and Arnone et al.
To keep the $ within its policy band, MAS had to intervene in the foreign exchange markets to mop up these large and persistent capital inflows. In the process, MAS accumulated a large stock of OFR. MAS’ foreign exchange intervention operations are essentially how we conduct monetary policy – which is solely directed at securing price stability. This is what we explained in our response to the US Treasury’s Report last month. Singapore’s monetary policy is centred on the exchange rate because it is the best way to secure price stability in a small, highly open economy. MAS manages the exchange rate as its monetary policy tool in the same way that other central banks conduct monetary policy by managing interest rates. Other central banks buy and sell government securities to affect liquidity and attain their interest rate targets. MAS buys and sells foreign currency against the Singapore Dollar to keep the $ within its policy band. Just as other central banks’ monetary policy operations cannot be construed as interest rate manipulation, MAS’ foreign exchange operations cannot be described as currency manipulation. 7 / 11  BIS central bankers' speeches  MAS has been in active dialogue with the US Treasury to ensure that our monetary policy framework and the role of foreign exchange intervention operations are well understood. The criteria the US Treasury uses is part of a generic framework that it has developed to assess the policies of its major trading partners.

Ravi Menon: Monetary Authority of Singapore's Annual Report 2018/19 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2018/19 Media Conference, Singapore, 27 June 2019. * * * Good morning. Welcome to MAS’ Annual Report media conference. GLOBAL ECONOMY The outlook for the global economy has deteriorated in recent months. In April, the IMF revised downwards its forecast for global GDP growth to 3.3%, from 3.7% last October. Last year at this time, at our annual report conference, I said that if the trade conflict between the US and China escalates into a trade war, all three engines of global growth – manufacturing, trade, and investment – will stall. We are now in the throes of a trade (and technology) war, and all three engines have indeed stalled. Global manufacturing is in a synchronised downturn. Last month, the global Purchasing Managers’ Index (PMI) for manufacturing fell to 49.8, its lowest level in more than six years. In the US, new orders are near their weakest levels in three years. In the Eurozone, the downturn in manufacturing is even more severe. In China, the manufacturing PMI is in negative territory. In Asia, manufacturing output is contracting in about half of the economies, including Singapore. Global trade volumes have declined for two quarters in a row – in Q4 2018 and Q1 2019. This consecutive two quarters of contraction in world trade is rare. The last time this occurred was ten years ago.
Although many people have experienced considerable improvement in their living conditions in recent decades, there are still far too many who have not yet been given the opportunity to benefit from the increase in wealth. In addition, there are still substantial environmental problems in many areas. However, the good results we have achieved since the Second World War show that we are on the right track - we need more and better globalisation, not less! I therefore consider that there is good reason for confidence in our economic future, but also that it is important for us to safeguard what we have already achieved, to make use of future opportunities that arise and to tackle the challenges that come in the wake of globalisation. As I see it, a strong multilateral framework is necessary to enable us to manage these challenges effectively. The driving forces behind the increased wealth in the world After the end of the Second World War, the architects behind the new multilateral economic system were determined to avoid a repeat of the fiascos during the 1930s, when countries introduced tariff barriers, made competitive devaluations and set up obstacles for payments. These measures halved world trade and led to falling GDP figures and declining real wages, mass unemployment and political chaos in large parts of Europe.

Despite these successes, there remains a lot to be done before everyone benefits from increased wealth. Although developments are moving in the right direction, the total number of poor people is still a problem. If the fruits of globalisation do not continue to spread to more countries with a poor population and within countries, there is also a risk of more states collapsing or other political problems that could slow down growth in the poor countries, and also have negative consequences for the rest of the world. The growing discrepancy between different regions is therefore worrying. This was clearly illustrated during the 1990s, when growth in Asia averaged 7 per cent, while the figures for Latin America and Africa south of the Sahara were 3.4 per cent and 2.3 per cent respectively. There is a huge contrast between, for instance, China, which has succeeded in lifting around 400 million people out of extreme poverty over the past twenty years, and Africa south of the Sahara, where the number of poor people increased by 150 million during the same period. In addition to weak states and internal conflicts, the African continent is hard hit by HIV/AIDS, which in some countries has reduced the average length of life from 55 years in 1990 to below 40 years in 2002, and left many children and young people to their own devices, without any adult authority. One of the most important challenges in future is thus to try to integrate Africa into the global economy to a greater extent.
With the loss of its monetary identity, Switzerland would have seen its interest rates, traditionally below German rates, converge to higher European interest rates causing severe pains to the Swiss economy. Fortunately, we did not experience this outcome. First, in the months following the introduction of the euro, it became apparent that markets were not anticipating a pegging of the franc to the euro. An expected peg would have generated a convergence in interest rates, which simply did not happen. Second, and as could have been expected, the monetary needs of the Swiss economy differed from those of the euro zone: •  As an open economy strongly oriented towards global markets, the Swiss economy felt more deeply the slowdown in global trade than the euro zone. •  Furthermore, the Swiss franc kept playing its role - although to a smaller extent - of safe haven in tense international situations. •  Finally, Swiss inflation was considerably lower than inflation in the euro zone, where adjustments and catch-up phenomena took place. Facing this reality, we decided to act independently and lowered interest rates initially in March 2001, a few months before the European Central Bank. Then, seeing a clear economic slowdown and a strengthening of the Swiss franc, we lowered interest rates repeatedly and aggressively. The magnitude of our policy loosening has exceeded that of the ECB. This year, with growth accelerating again an adjustment of monetary policy became necessary. We raised interest rates by 25 bp in June and September.

The notion that the welfare of a country boils down to the short-run profits of a few foreign exchange dealers is of course narrow minded. The reality offers a completely different picture. Switzerland has always suffered from external monetary turbulences and always wished for a stable monetary order. For example, the various crises of the European Monetary System in the 1990s, with a dramatic drop of the Italian lira, have led to the complete removal of the traditional textile industry from our economic geography. Such structural adjustment could arguably have occurred anyway, but the decisive factor at the time was of monetary origin. The purpose of the creation of the common currency was not only to concentrate the monetary power in the hands of the European Central Bank, but also to promote the conditions for transparency and competitiveness that would in turn foster trade, investment and growth in the single European market. Price comparisons are indeed easier today, and trade and liquidity management are much simplified, although it is still too early to numerically assess the impact of these effects on growth. Simplifying trade and investments benefits all members of the European monetary zone, and it also helps anyone interested in being active in the European market. Switzerland, with its high degree of  BIS Review 70/2004  1  integration in the euro zone, reaps large benefits from this stable situation. Thus, it is clear that on those aspects, the introduction of the euro was very good news for the Swiss economy. 2.
Many banks were closed on 1 January and an enthusiastic general public wanted to get hold of the new cash as quickly as possible, preferably on New Year's Eve. This meant that there was tremendous pressure on converting the ATMs to euro as quickly as possible at the end of the year, which the banks succeeded in achieving. On 2 January, 91 per cent of the ATMs in the euro area had been converted to euro, and it took only a couple more days until they all worked with  BIS Review 23/2002  1  euro banknotes. Many countries also distributed lower denomination banknotes (five and ten euro) via the ATMs to facilitate change for retailers. Despite this, and despite the advance distribution of coins, there arose a shortage of coins and of five-euro banknotes in a few places, although the system worked well on the whole. With regard to other types of machines, it has been reported that, for instance petrol machines could not accept euro banknotes at first. However, this is being overcome. The changeover to the euro was done in different ways in different countries. Naturally, help was required from all those who handle cash, and despite this there were long queues in many places. However, the customers seem to have accepted this with relative equanimity, perhaps because it was a holiday period and many had vacation at that point in time. The situation improved rapidly in the retail trade, but it took a little longer in the banks.

There was a net increase of about 6,900 jobs in financial services and FinTech in 2018, driven mainly by the banking and insurance industries.2 Over the last three years (2016–18), we saw an average of 4,900 financial services and FinTech jobs created on a net basis per year. This is above our ITM target of 4,000 net jobs growth in financial services and FinTech. 9 / 11  BIS central bankers' speeches  Hiring in the financial sector remains healthy so far this year and job growth is on track to meet the ITM target of 4,000. Sustaining this rate of job growth will not be easy in the face of technological change unless efforts are continually stepped up to upskill the workforce. As digitalisation and automation become more pervasive in the financial industry, jobs will be transformed. Some will inevitably be displaced. MAS, the financial industry, and our tripartite partners are taking this very seriously and undertaking a variety of measures to help prepare the financial sector workforce for a digital future. Last year, more than 20,000 individuals – or about one out of eight workers in the industry – went through MAS/IBF-supported upskilling programmes. Nineteen financial institutions have stepped forward and committed to re-skill close to 4,000 finance professionals and redeploy them in new or expanded roles over the next two years. Some 1,700 of them have already started this journey, and 800 have successfully transited into new roles. CONCLUSION Let me wrap up.
This could further weaken demand, negatively affect growth and inflationary convergence, and require a stronger than expected monetary impulse. On the other hand, the picture of health risks looks more balanced than it did a few months ago. Cumulative experience, the prevention measures and the strengthening of the healthcare systems reduce the probability of repeating the worst episodes of previous months in the event of a resurgence of the virus. Thus, it is possible that the deconfinements will proceed a little faster, allowing activity and employment to rebound sooner, especially if a vaccine is developed more rapidly. In such a case, inflationary convergence would require a somewhat less prolonged monetary impulse. The possibility of more negative risk scenarios, especially associated with the economic wounds inflicted by the pandemic, is still present. The various measures have made it possible to maintain credit flowing in line with working and investment capital needs, breaking the pro-cyclical relationship of credit. Going forward the materialization of investments, productive adjustments in sectors that have been forced to make profound changes in their operation, and increases in activity levels, will require that this financing continue to be available. Therefore, it is essential to ensure a sustained flow of credit, ensuring that the financial system does not see its levels of capitalization and liquidity deteriorate, whether due to regulatory changes and/or a sharper deterioration in the repayment capacity of households and businesses.

In terms of activity, the percentage of GDP generated in quarantined areas has dropped from 65 to 45%. The relationship between quarantined territories and economic activity, however, is far from mechanical, depending on sector-specific characteristics, the intensity of the measures in place and the actual behavior of individuals (Figure 2). Looking ahead, the process of deconfinement is not exempt from the risk of setbacks, as has occurred in other parts of the world and in some areas of the country. Globally, the loosening of confinements and the increase in mobility have cooperated to draw activity above its lowest points of April and May. Production, sales, and expectations show improvements in some countries (Figure 3). It should be noted that in China the data for the second quarter were above expectations. Financial markets and commodity prices have been favored by these trends, as well as by the highly expansionary monetary conditions promoted by the major central banks. The price of copper has fluctuated around $ per pound and market volatility has seen significant reductions from its highs of March and April. This represents an important difference with respect to external shocks that have affected the Chilean economy on past occasions. Our country’s economy contracted by 14.1% annually in the second quarter, its worst record in several decades. The biggest month-on-month drop was in April, subsiding in May and recovering slightly in June and then again in July. The sharp initial contraction also occurred in a wide range of countries, although with some nuances (Figure 4).
Some signs of this can be discerned; the latest figures suggest a minor blow to households’ expectations of Sweden’s economy, though this has not yet affected their personal economic expectations. There has been some fall in the growth of business credits. Another channel for effects on the real economy is the banking system. A more cautious supply of bank credits could dampen economic activity. In this respect the international turbulence gives cause for concern. The tendency in the late summer for investors to move to assets that were regarded as generally secure - a flight to quality - has developed into a general aversion to holding risk, with investors fleeing instead to assets that are more liquid. The economic fundamentals in particular countries are currently playing little part in investment decisions. This has hit some Third World countries very hard. The financial system in Sweden is monitored very closely by the Riksbank. The available statistics suggest that, compared with many international banks, Swedish banks are in a better position, with lower exposures to countries hit by the crisis. The picture also seems to be relatively good as regards exposures to hedge funds. This low exposure is probably a consequence of the bank crisis in Sweden in the early 1990s. So the risk of a domestically generated credit crunch should be small. Weak currency Besides increased uncertainty and greater risks of weaker economic activity, developments since the September Report was written have involved downward pressure on the Swedish krona.

Mr. Heikensten discusses monetary policy Address by the Deputy Governor of the Bank of Sweden, Mr. Lars Heikensten, at the Autumn Conference arranged by the Centre for Business and Policy Studies on 14/10/98. First a word of thanks for the opportunity to attend this meeting. The autumn conferences are a fine tradition to which it is a pleasure to contribute. On previous occasions I have used the opportunity to look back over the past year and discuss what the Riksbank has been doing, including how monetary policy is conducted. Then I have tried to look ahead and pick out some issues of importance for monetary policy in the longer run. My approach this year will be broadly the same. First a review of what has happened since last autumn, with comments on how the Riksbank’s assessment of inflation has evolved over the year. Then, as previously, a look at the question of how we communicate policy and how it has been perceived in financial markets. On this occasion we are in the throes of an international financial crisis, with great uncertainty as to what its real economic effects may be. Contagious effects of the crisis have gradually become larger and larger. Looking back, one can clearly see how the economic forecasts of most observers have swung during the year, from a phase of concern about a future increase in inflationary pressure to a phase of strong anxiety that the global economy will be hit by a recession.
As yet, there are few signs of a turnaround in the labour market and business tendency surveys indicate that the upturn in the private sector will be relatively weak this year. However, some improvement may be on the way, although it is difficult to determine exactly when the trend will turn. Recently, the number of new job vacancies registered has increased somewhat and the number of redundancy notices has declined. At the same time, the strained local government finances indicate a weak upturn in employment in this sector in the near future. The situation in the labour market has caused us to revise down our assessments of future wage cost increases. This was also included in the picture in February. The central wage agreements signed in the manufacturing and retail trade sectors have confirmed this development. Our new forecasts indicate wage cost increases of 3.5 per cent over the coming two years, which is slightly lower than in December. Last year there were increasing signs of more rapid productivity growth. While employment, measured as the number of hours worked in the business sector, developed weaker than anticipated, growth was largely as expected. This is reflected in more rapid productivity growth. We drew attention to this picture already in December. Since then, these developments have become clearer and been reinforced.

There was also a risk to the stability of the financial system. The economic slowdown that had begun could thus become more profound and prolonged than was previously anticipated. The easing of economic policy after the terrorist acts contributed to some recovery in international and domestic economic activity. In spring 2002 we made the assessment that inflation one to two years ahead would exceed the target level. A gradual upturn in the underlying inflation rate, combined with unexpectedly high wage increases in the services sectors in particular, indicated that resource utilisation could be higher than we had assumed. The repo rate was raised in two stages. Steering interest rates in several other small countries were also raised at this time. However, during the summer and autumn we saw more and more signs that the recovery had come to a halt. Industrial activity weakened and geopolitical unease increased, as did the concern that the heavy stock market fall that began in 2000 would affect households and firms more than expected. The Riksbank, like the  4  BIS Review 20/2004  ECB and the Federal Reserve, began to reappraise the prospects for economic activity and inflation. Towards the end of the year, we made a downward adjustment in the inflation forecasts and the repo rate was cut by as much as it had been raised during the spring. With hindsight, it could perhaps be claimed that raising the interest rate in spring 2001 and 2002 was unnecessary. However, this would not lead to a fruitful discussion.