samchain/econo-pairs-v1 huggingface dataset:
And indeed, since mid-2009, when capital flows began to return to Emerging Asia, most regional currencies have appreciated by 3–10% in nominal effective terms. 39. But exchange rates alone cannot shoulder the burden of adjustment to low global interest rates and large capital inflows. In fact, strong and sustained exchange rate appreciation may well attract even more capital inflows. And excessively rapid currency appreciation runs the risk of sharply curtailing exports and dragging down the economy. Nor is it clear that exchange rate appreciation alone could have mitigated the increased demand for credit and consequent surge in property prices that we have seen in Emerging Asia. 40. Likewise, interest rates are too blunt a tool to deal with sector-specific excesses, such as in real estate. An interest rate policy that is sufficiently aggressive to affect credit conditions and asset prices is likely to impose quite a high cost on the rest of the economy. 41. Asian policymakers have therefore been experimenting with a variety of so-called macroprudential policies, to rein in asset price inflation and avoid a build-up of imbalances amidst a low interest rate environment. Macroprudential measures as practised in Asia fall into two broad categories: •  One, prudential measures to restrain credit extended to the property market. These include loan-to-value ratios, debt service ratios, and caps on property lending. •  Two, fiscal measures to discourage property transactions of a speculative nature. These include transaction taxes, such as stamp duties and capital gains taxes. 42.

As China’s consumption increases, its rising import demand will have a positive impact on Asia and on the rest of the world. Besides China, India’s middle class is estimated to grow to almost 600 million people by 2025, and almost 60% of Indonesian households, in a country of 240 million people, are expected to reach middle-class status by 2020. The Asian Development Bank projects that, by the middle of the century, Asia will account for more than half of global GDP and will own half of the world’s financial assets and financial institutions. I’m sure all of you are cautious about long-term extrapolations, but this projection is one of many which are reflective of the optimism and growth potential that we see not just in China, but Indonesia and other Southeast Asian countries. As these countries in Asia power ahead, they will drive further economic integration within this region. PricewaterhouseCoopers’ “Future of World Trade” study describes how new trade corridors will form within Asia as a result of this integration. In 1990, 20 years ago, the developed economies dominated the world trade map. Europe was responsible for over half of the world’s exports, although these were mainly intra-Europe flows. In 2010, this map has changed with the global shift in manufacturing to Asia, with China accounting for 9 out of the top 25 bilateral trade routes by value.
Then, at the end of 2008 and at the beginning of 2009, we endured a severe economic downturn and disinflation, also triggered by a foreign event, namely the severe global financial crisis and the associated collapse of confidence. In both episodes the baseline scenario we outlined in the IPoM and IEF at the time went through unprecedented changes. Most recently, February’s catastrophe made it necessary to adjust our projections, particularly for the short term, to include the effects on output of this natural disaster. As we shared with you a minute ago, the data for the last quarters show, beyond the immediate and medium-term effects of the earthquake, that the economy is growing strongly, financial conditions have been steadily normalizing, employment is on the rise and inflation is approaching the 3% target. The most important difference between now and previous episodes during 2007–2009 are the fundamentals behind our current macroeconomic scenario. While in earlier years the larger part of inflationary and output fluctuations originated abroad, today they are related with macroeconomic developments at home. In particular, the foreseen closing of output gaps and the current level of the MPR, which is highly stimulative compared with several measurements of its neutral level. Thus, monetary policy must be applied in consistency with a stronger domestic scenario and in line with the inflation target. High risks persist internationally. Financial markets around the world and in some European countries are raising a red flag.

This topic has obvious importance to central bank practice past, present, and future. In addition, the Journal of Money, Credit and Banking (JMCB), the 50th anniversary of which we are recognizing today, played a very important role in shaping how we think about the ZLB. Today I’d like to highlight how this work has influenced my own thinking, as a researcher and policymaker. Before I proceed any further, I should give the usual disclaimer that everything I say today reflects my own views and not necessarily those of the FOMC or anyone else in the Federal Reserve System. The Zero Lower Bound Emerges Although the ZLB was not a new idea by any means, three circumstances—two empirical, one theoretical—came together to reignite interest in this topic by researchers and policymakers in the 1990s.1 The first was the achievement of low inflation in the United States, which, all else equal, implied lower interest rates. The second was Japan’s lengthening period of deflation and near-zero interest rates.2 The third was renewed curiosity about the theory of monetary policy as decision rules for interest rates, following the publication of John Taylor’s “Discretion versus Policy Rules in Practice.”3 Although that paper did not mention the ZLB, it fundamentally transformed how many economists, including one impressionable Stanford grad student, thought about monetary policy. Indeed, the very logic of the Taylor rule—that interest rates systematically move up and down with changes in economic conditions—forced macroeconomists to come to terms with the presence of the ZLB.
New conditions have been created not only for households and firms in the euro area and adjacent countries but also for economic policy. Sweden is by no means unaffected by this change, even though we are outside the euro area at the start. Economic development in the euro area is crucial for Sweden’s economy. As a member of the European Union, moreover, we are involved in many of the contexts where policy is formed. We have also undertaken to conduct our policy in accordance with the rules that have been established for the Union. Against this background it is important that we are engaged in the discussion of economic policy in Europe. My purpose today has been to highlight a number of issues of importance for the European debate. I have tried to describe how the ECB works, the rules that have been built up for fiscal policy and so on. I have also said something about events in the past six months and discussed some of the problems as I see them. One thing is certain: the euro’s introduction does not constitute the final step in the integration of Europe. The single currency will raise new questions that will be answered by degrees through the cooperation between the countries of Europe. It is important that Sweden takes an active part in that debate. BIS Review 76/1999  6  7  BIS Review 76/1999

The TCFD report signposts existing models that firms can use, and the PRA’s Climate Financial Risk Forum will work with industry to review tools and metrics, with the view to publishing reference scenarios and standard assumptions.15 For supervisors, assessing strategic resilience will require climate-related stress testing. This involves linking high-level data-driven narratives on the evolution of physical and transition risks to quantitative metrics to measure the impact on the financial system. Next month, the PRA will ask UK insurers, as part of a market-wide insurance stress test, to consider how their businesses would be affected in different physical and transition risks scenarios. Testing the banks, and possibly other participants in the financial system, with climate-change scenario stress tests would have two objectives:  15 The most widely used and well-known are the IEA transition scenarios, which model six different assumed pathways and associated temperature increases. For modelling physical risks, the IPCC’s four Representative Concentration Pathways (RCPs) fix greenhouse emissions and analyse the resulting change to the climate. 7  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  7  1. To consider whether, across the financial system, financing flows are consistent with an orderly transition to the climate outcome set out in the Paris agreement. These long-term scenarios can facilitate discussions between firms and their clients about possible risks across different sectors and geographies; and 2. To consider whether the financial system would be resilient to shorter-term shocks – including a climate “Minsky moment” when climate risks materialise suddenly.
Some property companies, which before the current crisis funded parts of their operations abroad, appear to be experiencing difficulties with their funding. 8  In simple terms one can say that the price of a property is determined by the expected operating surplus, that is rental income minus operating and maintenance costs, and by the investors' return requirement, which is the risk-free interest rate plus a risk premium. Investors are prepared to pay more for a property if they expect the rents to increase or if they do not require the capital they invest to generate such a high return. BIS Review 105/2009  5  Let me now say a few words about the Swedish housing market. Here, prices have not fallen in anything like the same way as for commercial properties. Despite the fact that we are experiencing the severest slump of the post-war period, house prices fell by only approximately two percent during the second quarter of this year compared to the same period last year. House prices in Sweden have so far fallen much less than in a number of other industrial countries (see Figure 14). Several of these countries, for example Ireland, Spain and the UK, have, however, had a much more ioverheated housing market than Sweden. Another reason why house prices in Sweden have not fallen as much may be that the Swedish banks have not been hit so hard by the financial crisis that they have found it difficult to lend money to the households.

But not many of us know that that when it comes to technology, Dr Zhou was ahead of the curve amongst his peers. In 2014, before the words “fintech” and “digital currencies” became popular, Dr Zhou set up a Digital Currency Research Institute within the PBoC to explore how new technologies like the blockchain and digital tokens could improve and strengthen China’s financial system. Today, China is a leading fintech player and there is even speculation that PBoC may become the first central bank in the world to issue its own digital currency – a topic that Dr Zhou will probably touch on, and if he does not, one of you I am sure will ask him about! And now, ladies and gentlemen, please join me in welcoming Dr Zhou Xiaochuan to deliver the tenth MAS Lecture. 2/2  BIS central bankers' speeches
Figure 3 Bank deposit inflows (*) (billions of dollars) 250  250  200  200  150  150  100  100  50  50  0  0  -50  -50  -100  -100  -150  -150  -200  -200  06  07  08  09  (*) Change in the external liability position of emerging economies' reporting banks. Includes Brazil, Chile, Mexico, Panama, Taipei (Chinese province), Hong Kong, India, Malaysia, Korean Rep., Singapore, South Africa, Turkey. Source: BIS. 8  BIS Review 72/2010  Figure 4 Price-to-earnings ratio in emerging economies (percentage) 40  40  30  30  20  20  10  10  0  0  07  Colombia Malaysia  08  09  Chile Korean Rep.  10  Mexico Singapore  Brazil  Source: Bloomberg. Figure 5 Real exchange rates in emerging economies (index, 2007-2010 average =100) 140  140  120  120  100  100  80  80  60  60  07  Chile Mexico  08 Brazil Peru  09 China Poland  10 Colombia Singapore  Malaysia Korean Rep. Source: Bloomberg.

Inflation has risen more slowly following the recent pay hikes than perhaps could have been expected in view of historical experience, and it is still well below target. This could be due in part to the additional scope provided by the favourable initial position of many firms and by the improvement in terms of trade. But the most obvious explanation is that lower prices in international trade and low or zero inflation in trading partner countries offsets domestic inflationary pressures, as can be seen in Chart 3. The downward price pressures from abroad have been stronger in recent months than was projected last spring, partly because of economic developments in China. But it is unlikely that the price of oil and other commodities will continue falling for a long time to come. The question, then, is what happens when prices stop falling – not to mention if they begin to rise again, as is forecast. Other things being equal, measured inflation would rise in Iceland. The Central Bank’s new forecast assumes, in fact, that oil prices will begin to rise again towards the end of this year. In addition, a portion of the wage increases will finally pass through to prices. According to the forecast, inflation will therefore rise in coming months, overtaking the target next year and peaking at just over 4% in the first half of 2017. It will not return to target until 2018.
On the one hand, it allows the economy a sufficiently long time span to accommodate significant changes in prices and monetary policy without entailing excessive costs in terms of lost activity or employment. The current environment is a good example of this. In the face of a shock such as the one we are dealing with, a shorter-term target would force a much more significant rise in the rate, thus increasing sharply the costs to the economy. On the other hand, a 24-month time horizon is a sufficient time limit for households and firms to avoid being affected by the uncertainty that could result from being unable to correctly anticipate how inflation will unfold. At a time when our economy is going through complex circumstances, reducing the spaces of uncertainty is greatly appreciated. Certainly, some of these spaces are beyond our ability to act, such as the war in Ukraine or monetary tightening in the world. But there are others where we do have the power to act. On our side, by assuring all those who live in Chile that the Central Bank will continue to do everything necessary to bring inflation down and return it to the defined target within the appropriate time frame. Maintaining and fulfilling this commitment is vital to help mitigate the costs that high inflation has on Chilean families.

In the first quarter, the seasonally-adjusted GDP series declined 0.8% from the previous quarter, with a drop of 0.2%  2  in non-mining GDP. In April, the seasonally-adjusted Imacec series showed a 0.3% drop compared to March; however, this variation was positive (0.2%) for the non-mining Imacec. Demand has evolved with a marked difference between private consumption and investment, where the former is persistently high. First-quarter data show that private consumption has not lost any significant dynamism and remains above expectations in March, remaining around the highs observed during 2021. Consumption of durable goods has undone part of the fall of the end of last year and services consumption has continued to perform strongly, especially in areas such as health care, restaurants & hotels, and transport, reflecting that the economy has been easing restrictions. Gross fixed capital formation (GFCF), in contrast, has shrunk in its every line, as we anticipated in March. In the first quarter, its seasonally-adjusted series fell by almost 6% from the previous quarter. The most notable decline was seen in the construction and other works component, although machinery and equipment also fell (figure 4). In the labor market, the demand for work has lost strength. This is reflected in the decline in the online job postings Index from its peak of a few months ago, although it is still above its levels of mid-2019.
The Funding for Lending Scheme: one year on It was on the day of this lecture last year that the Bank of England announced the first 13 banks and building societies to have signed up to the FLS. There are now over 40 firms participating, representing over 80% of the stock of lending to the UK economy. The total amount of outstanding drawings under the Scheme is over £ and rising. The MPC has been using a wide range of indicators at various stages of the transmission mechanism to help assess the extent to which credit conditions have improved since its launch. Let me run through those. Stage 1: bank funding costs Our first objective was to reduce bank funding costs – and this phase has been remarkably successful. Over the past year, those costs have fallen sharply (Chart 6). Of course, they are likely to have been affected by developments internationally, including Mario Draghi’s “do whatever it takes” remarks in July 2012. But usually sterling funding markets would react by less than euro-denominated markets to European developments. In fact, UK unsecured bond spreads fell further in the UK than in core euro-area countries – indicative of an additional boost from the FLS over and above general market developments.

On average we’ve seen rates on two-year fixed rate mortgage products come down by around 110bps since the FLS was announced, and floating rate mortgages by a bit less (around 60bps) (Chart 6). The availability of household credit, particularly secured credit, has improved according to recent Credit Conditions Surveys by the Bank of England. 8  BIS central bankers’ speeches  Chart 6 Changes in quoted mortgage rates and indicative UK bank funding costs over the first year of the FLS(a) Change in mortgage rate Change in bank funding cost(b)  Percentage points  0.0  -0.5  -1.0  -1.5  75% LTV two-year floatingrate mortgage  75% LTV two-year fixed-rate mortgage  75% LTV five-year fixed-rate mortgage  90% LTV two-year fixed-rate mortgage  -2.0  Sources: Bank of England, Bloomberg and Bank calculations. (a)  Change between 30 June 2012 and 30 June 2013. (b)  For fixed-rate mortgages, calculated as the sum of indicative UK bank secondary market bond spreads and the swap rate corresponding to the term of the mortgage. For floating-rate mortgages, three-month Libor is used in place of a swap rate. For more details see Chart 1.8 of the August 2013 Inflation Report. It’s harder to measure what has happened to lending rates to businesses as the borrowers and loan products available are less homogenous than in the household sector.
In time to come, I hope that it will be further fine-tuned so as to reflect the five qualities that I have just spoken about. In this process, it might be useful to modellers in Singapore and even from the region to meet more regularly to exchange ideas and learn from each other’s experiences. In the post-Asian crisis era, one of the main concerns of regional policymakers is that of monitoring vulnerabilities of the domestic economies to external shocks. There is a need for a formal and reliable monitoring mechanism to help supplement overall surveillance efforts. Perhaps macro models could be employed to this end. If workable, this might just be the function that renders models not only relevant but actually indispensable to policymakers. I leave you with this thought and wish you all a day of fruitful deliberations. 4  “Empirical Modelling in Economics: Specification and Evaluation”, The 1998 Marshall Lectures. 3  BIS Review 9/2000

Abdul Rasheed Ghaffour: Opening remarks – Forum on Central Bank Foreign Currency Operations Opening remarks by Mr Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the OSSP-BNM-SEACEN Forum on Central Bank Foreign Currency Operations, Kuala Lumpur, 6 August 2020. * * * It is my great pleasure to welcome all participants to the OSSP-BNM-SEACEN Forum on Central Bank Foreign Currency Operations. My appreciation also goes out to OSSP and SEACEN Centre for organising this forum. Although we have been looking forward to hosting all delegates and speakers in Kuala Lumpur, I am glad that technology has enabled us to come together regardless of this challenging time. I believe this forum is timely, given the myriad of issues associated with the current global landscape and the evolving environment for cross-border payment operations. The COVID-19 pandemic has caused widespread disruption within an inconceivably short period. We see disruptions in the lives and livelihoods of families and individuals; in the way work is done and trade conducted; and in our perspective of the world and our solutions to its problems. In at least one area we see the pandemic accelerate a growing trend both domestically and internationally – in digital trade and e-commerce. Retail purchases have more than halved year-on-year, and this gap is quickly filled by the rapid growth of e-commerce. This digitalisation trend is likely to continue post-pandemic with new norms in day-to-day domestic as well as cross-border economic activities.