samchain/econo-pairs-v1 huggingface dataset:
Since 2015, the Bank of Thailand has set a medium-term headline inflation target at 2.5 percent with a band of one to four percent. After running below the target for the past three years, inflation is finally back within the target range, albeit around the lower end, with headline inflation this year and the next forecasted at 1.1 and 1.2 percent, respectively. Some of the factors that have contributed to low inflation are transient, including large fluctuations in oil and agricultural prices. Nonetheless, core inflation, which is designed to look past these shortterm fluctuations has also been low as well, averaging only 0.7 percent year-to-date. For policymakers and economists, stubbornly low inflation against the backdrop of the improving economy is quite perplexing. While core inflation is expected to edge up further given a build-up in demand-pull inflationary pressures, many structural changes warrant monitoring as they might contribute to lower levels of inflation than in the past. This is an ongoing area of research by central banks around the world, as low inflation is not Thailand-only problem, but seems to be shared by a number of countries. Many studies—including Bank of Thailand’s own—find that there are several factors that would have impacts on long-term inflation dynamic. Aging population which implies more saving, manufacturing automation that drives the cost of production down, and online platforms that take away pricing power of traditional merchants are some of the few issues that have contributed and will continue to contribute to the low inflation in the long run.

Meanwhile, the Asian region has shown strong growth performance amidst robust intra-regional trade. This will be mutually reinforcing for the region in expanding the cumulative domestic market of the region and thus contributing to the overall growth prospects of the region. While growth remains strong, there are risks on the horizon. The recent moves to raise interest rates have however aimed to adjust the economic expansion to converge to more sustainable levels. Policies in a number of the major economies have now shifted from addressing a deflationary environment to a more neutral position that is aimed at removing the inflationary bias. This is in contrast to an anti-inflationary stance which would require aggressive tightening. On the domestic front, Malaysia continues to be highly integrated with the world economy in which economic and financial developments in our major trading partners will have implications on our economy. The strengthening of our economic structure, our financial system and our macroeconomic fundamentals, particularly since the Asian crisis in 1997-1998, has raised our tolerance level for absorbing volatility, enhanced our resilience to shocks, improved the agility to adjust to change and increased our policy flexibility to mitigate any adverse external developments on our domestic economy. Going forward, the strong growth in manufacturing and services sectors will continue to sustain growth. The prospects for higher consumption spending is also positive.
Under these new arrangements, the tax incentives aimed at deepening the securities market and encouraging investment in it are of two kinds: - Double taxation of dividends was prevented by raising the corporate income tax rate and making it the only tax on dividend income. In addition, the income tax rate for small shareholders was lowered. - For residents, capital gains on shares became exempt from taxation if the security was listed on an exchange. Capital gains from the sale of through licensed intermediaries were made tax free. Premiums from the issuance of stock are also tax free for stocks listed on a stock exchange that does not distribute dividends to shareholders. There are also tax facilities for government securities. Privatization is an important part of our modernisation and liberalisation effort. Turkey embarked on a privatization program in the 1980s. Turkey’s telecommunications and energy sectors are great targets for global partnership. Despite extensive exemptions from the program, by 1994 total proceeds derived from privatization since it began in 1986 had reached $ billion, which is not so bad. Moreover, 25 percent of this total came from sales on the Istanbul Stock Exchange. More than 60 percent of the sales were direct sales to domestic and international buyers. The main purpose of privatization is to get the government out of the business of business and increase the efficiency of the privatised enterprises.

Figure 2 Nominal loans by type of credit (annual change, percent) 30  30  25  25  20  20  15  15  10  10  5  5  0  0  -5  -5 03  04  05 06 07 08 09 10 11 Consumer Housing Commercial  12  13  Sources: Central Bank of Chile and Superintendence of Banks and Financial Institutions (SBIF). BIS central bankers’ speeches  7  Figure 3 Inflation indicators (annual change, percent) 10  10  8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  -6  -6 06  07 CPI  08  09  CPIEFE  10  11  CPIEFE goods  13  12 CPIEFE services  Sources: Central Bank of Chile and National Statistics Institute (INE). Table 1 International baseline scenario assumptions 2011  Growth  Trading partners' GDP  2012 (e) Dec.12 Mar.13 Report Report 4.2  3.3  2013 (f) Dec.12 Mar.13 Report Report  2014 (f) Dec.12 Mar.13 Report Report  (annual change, percent)  3.4  3.5  3.6  4.0  4.2  World GDP at PPP  3.9  3.0  3.0  3.3  3.3  3.8  3.9  United States Eurozone Japan China India Rest of Asia (excl. Japan, China and India) Latin America (excl.
Floating exchange rates: perception and experience Views on how floating currencies behave and what the implications of their implementation are have changed over the past 30 years, in the light of current experience. Early protagonists had fairly idealistic expectations with respect to floating. For example, Harry G. Johnson, one of the grand old men of international economics, when he stated hopefully 30 years ago: "a freely flexible exchange rate would tend to remain constant so long as underlying economic conditions (including government policies) remained constant: random deviations from the equilibrium level would be limited by the activities of private speculators…"1 This optimistic view was based on two convictions. For one, on the notion that exchange rate distortions are primarily triggered by inconsistent government policies oriented to short-term effects. In actual fact, the economic developments of the late sixties and of the seventies promoted the perception of a fundamental contrast between inherently stable private markets and a destabilising public policy sector. On the other hand, most economists were profoundly convinced that free exchange rate movements would be clearly dominated by inflation differentials with no lasting impact on real exchange rates. It must be borne in mind, however, that 30 years ago the play of global financial markets so forcefully driven by expectations was still in its infancy.

In a broader perspective which also includes impacts on the real sector, three points of view will be moved to the fore. First and foremost, trade relations with Euroland have always been strong, on the export as well as on the import side. Under the new bilateral agreements, our connectedness with the EU may become even stronger in the years to come. Given these structural conditions, it is clear that our economy is highly susceptible to shocks in the SFR/euro exchange rate. In actual fact, this marked dependence is the strongest economic argument of all those wishing to substitute the euro for the Swiss franc as soon as possible. BIS Review 2/2001  3  A second relevant perspective for the real sector is to be seen in the trend towards a real appreciation of the SFR since the transition to floating. Real exchange rate index CHF Export weighted, November 1977=100  130  120  110  100  real appreciation 0.6% p.a. 90  80  70 Jan 73  Jan 76  Jan 79  Jan 82  Jan 85  Jan 88  Jan 91  Jan 94  Jan 97  Jan 00  The rising trend - measured by the index of the real trade-weighted SFR exchange rate - averaged 0.6% per annum. Its main causes seem to be two special features of our economy. One is the extraordinarily high external surplus of approximately 10% of GDP, which generates a steady net demand for SFR.
Joseph Yam: Asia’s ability to cope with the continuing challenges of globalisation Statement by Mr Joseph Yam, Chief Executive of the Hong Kong Monetary Authority and Alternate Governor on the Board of Directors of the Asian Development Bank, at the 37th Asian Development Bank Annual Meeting, Jeju Island, Korea, 15-17 May 2004. *  *  *  Mr President, I join other Governors in: first, thanking the Government and the people of the Republic of Korea for their warm hospitality in hosting this year’s Annual Meeting; secondly, thanking the Bank’s management and staff for the excellent arrangements made; and thirdly, welcoming our two new members - Luxembourg and Palau. Mr President, on the governance of the Bank, I would like to commend the Bank for adopting a number of reform initiatives in the past year to enhance accountability and efficacy of operations. Greater transparency and accountability in all aspects of the Bank’s operation is to be welcomed. Measuring, monitoring and managing development results are essential. The creation of the independent Operations Evaluation Department will enhance the credibility of the Bank’s achievements. These initiatives will put the Bank in a stronger position in meeting the many tasks ahead. On the region, Mr President, I would like to focus just on the continuing challenges arising from globalisation and the ability, or rather the lack of ability, of Asia in coping with them. The Asian financial turmoil of 1997-98 demonstrated this vehemently.

But these numbers are still low for the bond market to play a meaningful role in contributing to financial stability and enhancing the efficiency of financial intermediation. A number of regional initiatives are currently underway to accelerate this development. Under the APEC forum, Hong Kong, China, joined by Thailand, Korea and the World Bank are leading the APEC Initiative on the Development of Securitisation and Credit Guarantee Markets. The ASEAN+3 forum has initiated an array of studies under the Asian Bond Market Initiative (ABMI) while the EMEAP Central Banks have already launched Asian Bond Fund I and are now working on Asian Bond Fund II, which aims at channelling a small portion of the very sizeable official reserves held by the Asian economies back into the region. Mr President, the Bank is uniquely placed to lend support to the region in these efforts, in three ways. First, the Bank can enlarge its technical assistance programme on capital market projects. In this connection, we are pleased to note the assistance the Bank is already providing to the bond market initiatives that I have mentioned. Secondly, the Bank can structure its own debt issuance programme with this objective in mind, as exemplified by Bank’s current efforts to issue local currency bonds in China and Thailand. Thirdly, the Bank can encourage borrowers to issue bonds in conjunction with ADB-financed projects through the provision of partial credit guarantees. Thank you, Mr President. 2  BIS Review 30/2004
We eventually learned from that experience that there really is no trade-off between growth and employment and inflation, except possibly in the short term, and that stability, defined as consistently low inflation - and achieved by keeping overall demand continuously broadly in line with the underlying structural, supply-side, capacity of the economy to meet that demand - is a necessary condition for sustainable growth. We learned that governments cannot sensibly seek to achieve their social objectives - however worthy they may be - by simply borrowing, or “printing”, the money to finance their expenditures, but need to balance their current receipts and expenditures over the economic cycle, borrowing only to finance productive investments. And we learned that the task of shorter term economic stabilisation was most appropriately left to the operation of monetary policy. That, very broadly speaking, is today’s macro-economic orthodoxy not just across a broad part of the political spectrum in this country but in most of the rest of the world. Now many people were initially sceptical about this change of emphasis - no doubt some still are. Fiscal responsibility, including tight control over all forms of expenditure, for example, on social security and pension provision, and on health and education - and monetary policy directed specifically at consistent stable, low, inflation - all sounds somewhat austere. What in particular does it mean in terms of its impact on the poorer sectors of our society? Well I don’t for a moment suggest it is the solution to all our problems.

Few people - even in the suffering sectors - argue that we should - not because of insensitivity to the economic and social distress that can result for those communities that are most affected, but because of the more extensive damage that it would be likely to cause to the wider community. I said a moment ago macro-economic stability depends upon keeping overall demand growth continuously broadly in line with the underlying structural, supply-side, capacity of the economy to meet that demand. There is not a lot frankly that macro-economic policy itself can do directly to affect the supply side which is obviously crucial in determining the rate of growth we can sustain. That depends fundamentally on the ability of management and the skills of the workforce, though it can be importantly affected by the whole range of government policies beyond overall fiscal and monetary policy. These policy choices are far more complicated than the more technical choices at the macroeconomic level - and they are way beyond my area of competence. But they are essential to the present debate so let me offer a view, as it were from the sidelines. A key issue in this area concerns the respective roles of government on the one hand and private markets on the other. And there is little doubt that the tide has recently been flowing in favour of private markets - certainly as far as direct government involvement in the processes of production is concerned.
At the same time, this change means that both borrowers and lenders become more sensitive to developments in house prices. All other things being equal, higher loan-to-value ratios should increase the risk of loan losses for the banks. However, while the banks are allowing a higher loan-to-value ratio, they appear to have compensated for this in recent years by tightening some of the requirements for granting loans. It has also become increasingly common that mortgage institutions offer interest-only loans. This also increases the borrowers’ and lenders’ sensitivity to developments in house prices. The fact that households are choosing not to amortize their loans to the same extent may be related to the rising house prices. House-owners have been able to see their loan-to-value ratio fall even without amortization payments. Amortization is also a form of saving, but it is not self-evident that it is the best thing for a household to have its entire savings in its own housing. If they choose not to amortize the loan, they may perhaps have some other form of saving that can be used if their incomes unexpectedly decline or costs increase. To summarise, I do not see any serious risks, from a stability perspective, in households’ growing indebtedness and in rising property prices – not at present. However, the current developments cannot continue indefinitely.

That would open the way to the immediate setting up of the European Central Bank so that it could complete its preparations for the irrevocable fixing of exchange rates with effect from 1st January 1999. It is important to be clear what the irrevocable fixing of exchange rates means. It does not mean that the participating national currencies would instantly disappear. They would continue to exist initially as separate denominations, or sub-units, of the euro, which would have become a currency in its own right. The DM or French franc or whatever would in effect relate to the euro just as pence relate to the pound - except that the fixed conversion rate would be a great deal more complicated, extending to six significant figures! There would be no euro banknotes or coins at that stage, only book entries in euro-denominated bank accounts for those who wished to use them. No-one would be compelled to use the euro; but equally no-one would be prohibited from using it or offering euro-denominated facilities. The European Central Bank and the National Central Bank members of the European System of Central Banks would denominate their transactions in financial markets in euro, although euro-denominated amounts would be convertible into national currency denominated amounts and vice versa through the payments system for those that wished. To provide added impetus, national governments will denominate new debt issues in euros, and some at least may also convert their outstanding debt to the euro-denomination.
During the course of the crisis, this interest rate differential was continually eroded as the SNB quickly reached the zero lower bound and the ECB continued to ease its monetary policy. When the SNB introduced its minimum exchange rate in September 2011,  6  To attain this goal, the ECB introduced a number of additional measures, including targeted longer-term refinancing operations. 7  Chart 15 shows interbank offered rates for Switzerland, the Czech Republic and Sweden, and transaction-based interbank rates for Denmark and the euro area. 6  BIS central bankers’ speeches  the interest rate differential between Switzerland and the euro area was already smaller than it had been before the crisis. It was, however, still significant. The ECB’s monetary policy easing from mid-2014 had a much greater impact on Switzerland than on the other neighbouring countries, as it led to the interest rate differential disappearing completely. This had dropped to almost zero by the end of 2014 (cf. chart 16).8 For the other neighbouring countries, the interest rate differential to the euro area was within its normal range at the end of 2014. The reason for this was, of course, that these countries had similarly high interest rates as the euro area at the start of the crisis, and that their central banks were therefore able to lower rates to the same extent as the ECB.

Sweden’s Riksbank and the SNB, however, lowered their reference interest rates almost to the 0% bound,3 thereby de facto exhausting their room for manoeuvre using conventional monetary policy measures. Movements in nominal exchange rates in Europe, which will play an important role in the second and third phases, varied from one country to another during this first phase. There was already upward pressure on the Swiss franc (cf. chart 5), due to the currency’s traditional role as a safe haven. In times of substantial global uncertainty, investors take refuge in such currencies, which subjects them to upward pressure. 1  Chart 3 shows consumer price indices in the Czech Republic, Denmark, the euro area and Switzerland. For Sweden, the CPIF, of relevance for the Riksbank, is shown; this is a consumer price index that assumes fixed mortgage rates and thereby excludes the effects that interest rate changes have on households servicing mortgage debts. In this chart and those that follow, data is shown only until the end of 2015. 2  Chart 4 shows the following reference interest rates: for Switzerland, the middle of the target range for the threemonth Libor; for Denmark, the central bank’s lending rate; and for the Czech Republic, the euro area and Sweden, the repo rate for monetary policy operations. 3  In Sweden, the overnight deposit rate was lowered into negative territory in 2009. This facility, however, was and is almost never used – rather, the intraday deposit facility is used, and its rate remained positive in 2009.
And there will often be scope for those affected to work out ways to circumvent them, including by moving activities outside the regulatory perimeter. As Federal Reserve Board Governor Jeremy Stein has noted, monetary policy may be a blunt tool for addressing financial stability risks, but it does have the virtue that it “gets in all of the cracks”. 7 So, there may well be times when monetary policy is the only game in town to guard against incipient financial stability risks. In that case, we are back in the world where monetary policy makers need to be prepared to consciously lean against the wind by deliberately undershooting their inflation target in the near term in order to reduce the likelihood of something nastier down the road. This thinking has now been embodied in the Chancellor’s remit for the MPC, which sets our objectives each year. It notes that “circumstances may arise in which attempts to keep inflation at the inflation target could exacerbate the development of imbalances that the FPC may judge to represent a potential risk to financial stability. The FPC’s macroprudential tools are the first line of defence against such risks, but in these circumstances the MPC may wish to allow inflation to deviate from the target temporarily.” The remit also directs the MPC to have regard for the actions of the FPC and vice versa. I opened my remarks tonight by observing that my time at the Bank has neatly fallen into two halves.

As Secretary of the Treasury Henry M. Paulson, Jr., Federal Reserve Chairman Ben S. Bernanke and others have stated, we need a companion framework for facilitating the orderly unwinding of other types of regulated financial institutions where failure may pose risks to the stability of the financial system. The elements I just outlined need to be accompanied by a clearer structure of responsibility and authority over the payments system. Payment and settlement systems and central counterparties play a critical role in financial stability. Our current system is overseen by a patchwork of authorities, with responsibilities diffused across several agencies in a manner that leaves significant gaps. We need a more formal and integrated framework of oversight, one that establishes and enforces standards and continuously monitors the conditions in these markets. BIS Review 95/2008  3  And finally, as we adapt the U.S. framework, we have to work to bring about a consensus among the major economies on a complementary global framework. Given the level of financial integration globally, we cannot achieve a reasonable balance at home between efficiency and stability, without a complementary framework of supervision and regulation across the other major financial centers. To make it operational, the framework I just laid out will require a complicated set of choices. •  What level of conservatism should be built into future prudential regulations over capital and liquidity? •  Which types of institutions should be subject to these requirements?