in which it is assessed that vulnerabilities are incubating in the banking sector that generate systemic impact. this also prevents and mitigates abrupt reductions in credit in the future, thus mitigating the potential amplification of shocks to the rest of the economy. the activation of the countercyclical capital requirement depends on an overall assessment of the outlook for financial stability and not on a specific indicator. all in all, it is a macroprudential instrument that must consider its impact on the financial system, recognizing differentiated spaces for other micro prudential actions and measures. the standardized background set defined by the central bank to decide the activation of the countercyclical capital requirement is divided into four steps that feed into each other. first, the regulatory context which is a summary of new regulation or international standards that need to be taken into consideration in the setting of the ccyb. second, an exhaustive analysis of the current stage of the credit and its drivers. third, a heatmap reviewing multiple variables that includes indicators for vulnerabilities, risks, and financial and macroeconomic conditions. fourth, macro financial models that are used to create a medium - and long - term macro financial outlook on future trends that contribute to the financial policy decision - making. 2 / 3 bis - central bankers'speeches in addition, the modelling part plays an important role in the stress exercises, which measure the vulnerability of the system and helps guide the activation and calibration of the buffer. also, the central bank of chile counts on complementary models that have been developed to discuss potential macroeconomic effects and support trade - off analysis. as stated in the policy framework, the activation and release of the ccyb requires expert judgment from the central bank's board. also, interaction with the financial market commission plays a crucial role in the decision process. looking forward, our policy research agenda should continue looking at the interaction of different policies with the ccyb and its macroeconomic impacts, such as the interaction between financial and monetary policies ; the relation with other prudential policies and / or other buffers and the evaluation of the impacts of a neutral level higher than zero for the level of the ccyb in " normal times ". the first official financial policy meeting, formally communicated to the market, took place in may 2022 and the most recent one occurred last november. on both occasions, the board unanimously decided not to activate the ccyb. it was considered

to normalize, a process that will continue in the next two years. the baseline scenario admits new episodes of volatility in the international financial markets, insofar as they do not escalate to a widespread negative shock on emerging economies. finally, the recent drop in the oil price means relatively stable terms of trade in 2019 and 2020. this considers an average copper price similar to september ’ s : usd 2. 85 in 2019 and 2. 80 in 2020 ; and a brent - wti average oil price around usd 60 dollars in the period ( table 2 ). domestic financial conditions at home, financial conditions are still favorable. on one hand, domestic long - term interest rates and risk indicators have remained relatively isolated from external events, while shorter interest rates have risen in line with monetary policy developments. in turn, the cost of credit has remained low and loans — mainly the commercial and consumer segments — show somewhat higher growth in a context where lending standards have relaxed somewhat ( figure 6 ). the stability of the local financial markets contrasts with those of other emerging countries in recent months. this is based to a large extent on the cushioning role of our exchange rate float and the substantial availability of domestic financing. thus, the exchange rate has shown major ups and downs in the past few months, fluctuating between clp 660 and 690 most of the time. compared to november last year, the peso has depreciated close to 7 % against the dollar, consistently with the global strengthening of the us currency. the real exchange rate level is near its averages of the last 15 to 20 years. as a working assumption, we estimate that it will oscillate around these values throughout the projection horizon. inflation as i mentioned at the beginning, after being under 2 % annually almost the entire second half of 2017, headline inflation has been rising this year, to approach 3 % in recent months. although part of this rise is explained by the more volatile cpi items and the peso depreciation, inflation of the basket components that are more sensitive to the activity gap ( ie. services and non - tradables ) has increased gradually but steadily over the course of 2018 ( figure 7 ). in terms of projections, the drastic fall in fuel prices results in a downward revision to cpi inflation this year and next, ending 2018 and 2019 barely below 3 %. towards 2020, once these effects fade out, the cpi inflation will be around 3 %. the cpiefe — total cpi