they affect households ’ purchasing power. a price impulse can gain a foothold and have long - lasting effects on inflation regardless of where it originates. and the central bank must parry long - lasting effects, whether the impulses come from wages, food prices, oil or something else. the outlook is far from certain … in the forecast we published just over two weeks ago we assume that the rapid commodity price rises are partly temporary and that they will subside in the future. we are also expecting the krona to be strong. this will contribute to inflation falling. but of course this is uncertain, not least for the reasons i took up earlier this morning. if the international price impulses were to become stronger and longer lasting than expected, inflation would of course be higher. but as i see it, it is not impossible that the international price rises will instead be lower than expected. this would push down inflation more quickly. one possible reason for this would be if international economic activity slows down more quickly than anticipated. we have highlighted these risks in earlier reports. a further factor, which in my opinion contributes to the uncertainty in the assessment, is the increased interest in portfolio investment in commodities. if the expectations of future return on such investments alter, it could contribute to a more sudden slowdown. and this would gradually affect consumer price inflation. it is also possible that such an effect – that capital is withdrawn and invested in other assets – has contributed to the price of wheat falling more rapidly recently. with regard to movements in the commodity markets since the previous forecast, prices have moved in slightly different directions. pricing in different forward markets currently gives a slightly divided picture of what direction prices will take. the oil price has risen more than expected and forward rates imply that it may remain at a higher level. at the same time, the world market price for certain foods and metals has fallen in recent weeks, for instance, the price of wheat, meat and aluminium. however, the price of some other foods, such as rice, has risen recently. … but we must nevertheless take a stance but regardless of whether the international price impulses are temporary or more lasting, they must not be allowed to push up inflation permanently! in my opinion, the risk of this has increased in that inflation expectations have risen during the autumn. according to prospera ’ s survey in april, however, expectations have fallen slightly. the national institute of economic research ’ s consumer tendency survey also indicates that households ’ inflation expectations have been

reserve bank of fiji keynote address by the reserve bank of fiji governor, mr ariff ali south pacific central banking research conference, 12 december 2018, holiday inn, suva your excellency, ms amy crago, australian deputy high commissioner to fiji ; mr loi bakani, governor, bank of papua new guinea ; mr denton rarawa, governor, central bank of solomon islands ; deputy governors and fellow central bankers ; members of the griffith university faculty ; distinguished guests and participants ; ladies and gentlemen ; bula vinaka! it is indeed an honor for me to give the keynote address in this inaugural south pacific central banking research conference, co - hosted by griffith university and the central banks of papua new guinea, solomon islands, vanuatu and fiji. in fact, i am delighted that we central bankers in the pacific have taken this bold step to strengthen our research capacity, which is evident by the high - level attendance today, of representative central banks from the region. our being here also demonstrates our sincere appreciation of the commitment of griffith university and the australian government to assist in the research capacity of our pacific central banks. reserve bank of fiji i wish to congratulate dr pramendra sharma and the team from griffith university for convening this conference, an ultimate outcome of some years of dedicated work to highlight the research initiatives of our pacific central bankers and provide a platform for dialogue, information sharing and future research opportunities. deputy governor masitabua has welcomed us all last night so i do not wish to repeat his welcome, but i only wish to mention that the reserve bank of fiji is indeed privileged to co - host this inaugural conference and we look forward to fruitful deliberations in the next two days. collaboration with griffith university ladies and gentlemen, i wish to share at the outset a brief background of our journey with griffith university. the griffith - south pacific central banks ( spcbs ) partnership with the support of the australian government has come a long way, from one joint - working paper with the rbf in 2014 to almost 25 published and partially completed working papers amongst the four central banks represented here today. we have indeed proven ourselves as worthy partners with griffith university, and we can only expect bigger and better outcomes from this great partnership. i understand that one joint - paper under this collaboration has been published in the “ review of pacific basin financial markets and policies ”, a prestigious academic journal in singapore, and another has been accepted for publication in the “ journal of the asia