Nor can we rule out that the passthrough of previous rises in world prices to domestic ones, especially for foodstuffs, may continue. Other risks have not changed materially. Incoming news confirm a scenario of very dynamic domestic demand, particularly for consumption, and employment (figure 14). Also wage growth has speeded up and credit is recovering fast. The domestic economy is growing strongly and output gaps are closed. Nonetheless, it is still early to predict an overheating. Actually, the various core inflation measures are still below 3% (figure 15). Output is near full capacity and, mirroring the rest of emerging economies, excess domestic demand is being redirected to imports. The current account still shows a surplus, largely because of good export prices, but also because of steadily increasing volume sales abroad. Furthermore, monetary policy works with a lag, so it is likely that the full effects of the 450-basis-point increase in the MPR since June of last year will not be seen for some time. The information we will be getting in the coming months will give us a better sense of the magnitude of these effects. Overall, the negative implications of these risks materializing led us to speed up the pace of monetary policy normalization in the past few months. Last week we actually raised the MPR by 50 basis points to 5%. Although the median of market expectations was foreseeing a somewhat smaller increase, we acted preventively to hold down the dynamism of domestic demand and the propagation of adverse supply shocks.

It is an essential competency for individuals to navigate the increasingly complex financial landscape. At a global level, in recent years, we have seen a significant increase in the complexity of financial products and services, making it more difficult for individuals to make informed decisions that safeguard their financial well-being. What is alarming is the fact that the level of financial literacy globally is very low. International research finds that, only 1 in 3 adults worldwide are financially literate. This is worrisome not only because of the negative repercussions at the individual level, but also, because of the potential impact it may have at the broader level of a country's economy, including financial resilience and stability. For instance, there are studies indicating that poor financial decision-making, including excessive risk-taking by individuals, preceded financial crises in the past. This phenomenon appears to be accentuated when the preceding prosperous periods have a longer duration than usual, as described by Minsky's Financial Instability Hypothesis. Examples include the Global Financial crisis, where  1/5  BIS - Central bankers' speeches  many people became over-indebted to purchase real estate, as prices appeared, at least to them, to be ever-increasing. When the bubble eventually burst, they were unable to cope with their financial obligations creating a domino of bankruptcies thus, raising further financial stability risks. The negative repercussions of financial illiteracy and of other shortcomings of financial markets, especially on financial stability, can be addressed by enhancing the efficiency of financial regulation.