g padmanabhan : managing currency risk in the new normal special address by mr g padmanabhan, executive director of the reserve bank of india, at the iforex leaders summit, mumbai, 28 july 2012. * * * assistance provided by s / shri g mahalingam, sudarsana sahoo and s rath gratefully acknowledged. ladies and gentlemen, i am happy to be here today and share with you my perspectives on this interesting theme of the seminar. it does take a lot of courage to coin anything as “ normal ” these days. what is “ new normal ”? 1. mr. mohamed el - erian and mr. bill gross of pacific investment management company ( pimco ) coined the phrase “ new normal ” during early 2009 that basically signifies a downward shift in potential growth of the advanced economies post - crisis and the consequent change in the global economic order with the emerging economies moving to the centre stage. the phrase captured the imagination of the world and started to be used in varied contexts to broadly underscore regime shifts and hard transformation. what is “ new normal ” in the context of currency risk? 2. the current level of inr - usd exchange rate is being talked as “ new normal ”. some people also cite the level of volatility that inr - usd exchange rate has been witnessing during the recent period as “ new normal ”. the rupee has witnessed sharp depreciation and increased volatility during the recent period driven by both global and domestic factors. the episode began after the historic downgrade of usa by s & p in august 2011 that triggered heightened risk aversion and sell - off of assets of emerging economies including india by the foreign institutional investors ( fiis ). the risk aversion environment has further heightened on escalating euro - zone concerns and falling global growth. the weakness in macro - economic fundamentals, bottleneck issues relating to infrastructure and concerns over implementation of gaar have dented india ’ s appeal as an investment destination leading to further fall in capital inflows. apart from the growth perception of the indian economy, risk appetite of the global investors and growth prospects of competing economies have driven the magnitude and direction of capital flows to india. thus, the flows are largely autonomous and remain beyond the reach of conventional policy instruments. on the other hand, the trade balance deteriorated despite depreciation of the rupee mainly due to relatively price inelastic nature of some

stephen s poloz : release of the monetary policy report opening statement by mr stephen s poloz, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 20 january 2016. * * * good morning, and thank you for coming today. let me begin as usual with a few remarks around the issues that were most important to the governing council ’ s deliberations. at the global level, 2015 was a little disappointing as the world dealt with diverging economic prospects and shifting terms of trade, but we expect gradual strengthening to resume in 2016. there has been considerable attention paid to recent developments in china, and this has added to volatility in global financial and commodity markets. however, it was governing council ’ s judgment that china will remain on its transition to a more balanced and sustainable growth path, from around 7 per cent annual growth to around 6 per cent. volatility in equity markets is, of course, not always a reflection of weak economic fundamentals. nevertheless, the global equity - market correction may inject a further measure of caution into business decision making. our global outlook remains positive, albeit cautiously so. governing council believes that the u. s. economy remains solid – the fourth quarter of 2015 was soft, but we believe this to be largely temporary for reasons we discuss in the monetary policy report ( mpr ). solid fundamentals, including strong employment gains, high consumer confidence and very strong investment outside the energy sector should see u. s. growth return to close to 2 1 / 2 per cent this year. not coincidentally, the canadian economy appears to have stalled in the fourth quarter. there were some temporary factors at work for us, too, but the main issue was slower exports to the u. s. we expect growth to pick up to 1 per cent in the first quarter, along with the u. s., and then to move back above 2 per cent for the remainder of the year. our new annual growth forecast for 2016 is 1. 4 per cent ; however, much of the downward revision in that figure is because of the weakness we saw in the final quarter of last year. on a fourthquarter - over - fourth - quarter basis, growth for 2016 is projected to be a more solid 1. 9 per cent. in its deliberations, governing council focused mainly on the implications of lower prices for oil and other commodities for canada and for monetary policy. this shock is