In addition, there were huge quality improvements in products and services, which also contributed to price rises. Last but not least, as these countries were establishing functional market economies, they had to allow for market rather than administrative determination of prices. As prices were previously kept artificially low, these changes caused additional inflationary pressures. The implementation of structural reforms that are prerequisite for real convergence, also creates pressures on the fiscal policy, i.e. the budget deficit and consequently inflation. Part of the costs for the economic reforms are financed from EU pre-accession funds, whose utilization, although it does not imply direct increase of the budget deficit and jeopardizing one of the nominal Maastricht criteria, still could have a significant liquidity effect, creating inflationary pressures. The combined effect of the of these factors on the supply side and on the demand side, is reflected in the relatively high inflation in these countries, the average annual rate of which in the period 1993-2007 in the countries of Central and Eastern Europe ranged from 6% in the Czech Republic to 38.6% in Lithuania. (By mid-90s, in South Eastern Europe, and in Bulgaria and Romania, there were frequent instances of extremely high inflation. In this group, in the period 1998-2007, the average annual inflation rate ranged from 2.1% in Macedonia to 31.1% in Serbia). 7 Such movements caused appreciation of the real exchange rate, which was especially emphasized in the new member states.

Infrastructure Asia harnesses the networks and collective capabilities of public sector agencies and private sector firms across the region to meet Asia’s infrastructure needs by (i) connecting partners in the 2/5  BIS central bankers' speeches  ecosystem; (ii) building capacity in demand markets; and (iii) providing top-level project advisory to improve bankability. Infrastructure Asia provides an open platform for Chinese (including Shanghai-based) infrastructure developers and financial institutions to partner players in Singapore in regional infrastructure projects. b. Furthermore, as infrastructure demand and foreign investments along the Belt and Road region increase, we expect a boost in demand for commodities and growth in commodity trade. Singapore’s strategic location in the crossroads of key trade flows has enabled commodity traders in Singapore to capture such opportunities. Shanghai Pudong Development Bank (“SPDB”) opened its first overseas commodity centre in Singapore in October this year, providing global commodity businesses with commodity-related financial services and solutions. c. Singapore banks are also embarking on BRI collaborations with Shanghai banks. UOB signed a MOU with SPDB in September this year to serve companies hoping to tap on BRI opportunities, providing financial solutions covering investment advisory, cross-border RMB transactions, syndicated loans, project and trade finance, and cash settlement. OCBC Bank signed its second MOU with Bank of Shanghai in April this year, leveraging each other’s strengths, networks and platforms to support customers in their BRI expansion plans, including access to OCBC’s funding and risk management solutions for Bank of Shanghai’s corporate clients.