Accordingly, procedures for inward capital flows by foreign investors were further simplified and streamlined while limits on outward capital flows by residents were further 37  broadened in selected areas. The new regulatory measures also include the relaxation on foreign exchange transactions, which enable general permission to Authorised Dealers to transfer enhanced eligible migration allowance in order to overcome procedural delay. We are in the process of reviewing stakeholders’ feedback on the new regulations, orders and directions issued in 2017 under the FEA and intend to revisit those with a view to further simplifying the regulations to improve clarity. We intend to take actions to revisit liberalised capital transactions based on the analysis of macroeconomic dynamics supported by policy oriented research. We also plan to review the criteria in granting permission for money changing businesses to increase healthy competition among market players and reduce informal market activities. The monitoring function will be strengthened further by developing a new real time foreign exchange reporting and monitoring system to capture data on foreign exchange sales and purchases. With a view to obtaining all data pertaining to cross border and internal transactions in foreign currency, we intend to put in place a comprehensive International Transactions Reporting System (ITRS). Meanwhile, as there are no clear provisions under the FEA to combat unauthorised and unlawful activities involving foreign exchange, several enforceable sanctions are expected to be introduced into the FEA to enable the Department of Foreign Exchange to strengthen its surveillance of unauthorised foreign exchange market activities.

On the state and local side, a rising economy should boost sales and income tax revenue, and help narrow near-term fiscal shortfalls. We also need to remain watchful for signs that low interest rates could foster a buildup of financial excesses or bubbles that might pose a medium-term risk to both full employment and price stability. Fortunately, current risk spreads on U.S. financial assets are not unduly compressed. This suggests that people are still being relatively cautious about taking on a lot of financial asset risk. On the inflation side of the ledger, there are some signs that core inflation is now stabilizing after falling for several years. At the Fed, we track core inflation (which excludes the volatile food and energy prices) because experience and research tell us that core inflation provides the best measure of whether overall inflationary pressures are building up or subsiding. Core inflation has proven quite reliable in predicting future total, or “headline” inflation rates. At the moment, both headline and core inflation remain below levels consistent with our dual mandate objectives – which most members of the FOMC consider to be 2 percent or a bit less on the personal consumption expenditures (PCE) measure. Recent evidence shows that the large amount of slack in the economy has contributed to declining inflation over the past couple of years. I expect this slack to continue to dampen price pressures in the near term. Inflation expectations are well-anchored today and we intend to keep it that way.