In this respect, macroprudential policy can easily be misconstrued, obscure policy intentions and distort expectations. Concluding remarks Allow me to conclude by drawing some general lessons from this quick overview of central banking for emerging markets in the post-crisis global economy: (a)  the judicious use of macroprudential tools can provide an additional degree of freedom to conduct monetary policy aiming at price stability at home while preserving financial stability;  (b)  the debate will have to continue regarding the ways to ensure that the complementarity between the two instruments does not confuse and undermine market confidence; and  (c)  the importance of making progress in developing a framework for financial stability policy is paramount. This would involve refining our macroprudential policy tools, developing new ones, and improving our understanding of how these tools impact the financial system and the economy. References Agénor, P.R., and L. A. Pereira da Silva (2013),” Inflation Targeting and Financial Stability: A Perspective from the Developing World”, an e-book by CEMLA and Inter-American Development Bank, October 2013. International Monetary Fund (2011a) Recent Experiences in Managing Capital Inflows – Cross-Cutting Themes and Possible Policy Framework. Strategy, Policy and Review Department (February). International Monetary Fund (2011b) Macroprudential Policy: An Organizing Framework. Monetary and Capital Markets Department (March). International Monetary Fund (2012) The Liberalization and Management of Capital Flows: An Institutional View. Washington DC: International Monetary Fund, November, http://www.imf.org/external/np/pp/eng/2012/111412.pdf. 4  4  See IMF (2013a).

Key challenges and prospect for the world and domestic economy We meet today at the time when the international economic and financial environment has become immensely more challenging. To a large extent, this has been due to the significantly higher degree of uncertainty that has prevailed on several fronts in the world today. Firstly, is the uncertainty about the prospects for global growth in the aftermath of the Global Financial Crisis. The persistence of this uncertainty is now having its implication on sentiment and confidence. Secondly, are the conditions in the commodity and financial markets that have become more volatile. The massive shifts in global liquidity are precipitating volatile capital flows with its immense implications on the asset and foreign exchange markets. Thirdly, is the increased uncertainty prevailing in the policy environment in the global economy in terms of the extent and timing of policy changes. In particular, is the uncertainty with respect to the timing of the exit from the highly accommodative policies and the implications of the divergent monetary policy stance that are being pursued in the major economies. Fourthly, is the uncertainty related to the implementation of the structural reforms to address the structural rigidities and deficiencies that surfaced during the Global Financial Crisis. Fifth and finally, are also considerable geopolitical uncertainties prevailing in the world today. Cumulatively, these developments have compounded the uncertainties surrounding the global economy. In this environment of great uncertainty, a more moderate recovery of the global economy has been projected for 2015.