measured against a basket of our closest trading partners ( twi ) – is now around 7 percent lower than its pandemic peak. the most notable driver of recent inflation pressures, from a tradables perspective, is rising oil prices. new zealand petrol prices increased 30 percent in 2021. higher oil prices have resulted from robust global demand, restrained oil supply during the early stages of the pandemic as global economic uncertainty increased, and more recently geopolitical tensions in eastern europe. higher fuel prices are pervasive within the economy, as they are a significant input cost for many firms. price pressures arising from tradables inflation is also becoming more broad - based. globally, the recent significant government and monetary stimulus helped avoid the prolonged negative impacts on demand from the covid - 19 pandemic. now, this demand is struggling to be met with sufficient global supply due to continued covid - 19 outbreaks and various health related restrictions and disruptions. the degree of inflationary pressure experienced across economies has, to some extent, depended on the different starting points and experiences heading into the pandemic. most of our advanced economy trading partners have experienced a long period of very subdued ( often below target ) consumer price inflation and persistently high unemployment ( see figure 4 and table 1 ). until recently, the central banks of japan, the united states, euro - area, australia and ( less so ) new zealand were all increasingly concerned about undershooting their inflation mandates. figure 4 – headline consumer price inflation ( cpi ) across selected economies % change yoy - 1 united kingdom canada united states euro area new zealand australia source : federal reserve bank of st. louis, economic data ( fred ) the pandemic has tipped this concern on its head. central banks are now signalling and undertaking policy tightening. these policy responses vary across countries based on their starting point measures of inflation and policymakers ’ own assessment of inflationary risks. table 1 – comparisons of central bank starting points ( 2019 – 2021 ) country cpi ( 2019 y / y % ) cpi ( 2021 y / y % ) unemployment % unemployment % new zealand 1. 9 5. 9 4. 1 3. 2 australia 1. 8 3. 5 5. 0 4. 2 united states 2. 3 7. 0 3. 6 3. 9 united kingdom 1. 3 5. 4 3. 8 4. 1 euro area11 1. 3 5. 0 7. 5 7. 0 sources : statistics new zealand, australian

no compelling evidence of overheating in the property market. more importantly, commercial banks have maintained their mortgage lending standards, with still conservative loan - to - value and loan service - to - income ratios. on the external side, the demand for imports of goods and services has been quite robust, prompting the central bank to intervene deliberately in the foreign exchange market. in the first eleven months of 2013, the central bank sold us $ 1. 3 billion to authorized dealers compared with us $ 1. 7 billion one year ago. with the bank calibrating its sales of foreign exchange to address imbalances in the foreign exchange market, the level of gross official reserves rose to us $ 9. 3 billion at the end of november 2013. this represented more than 11 months ’ import cover. central bank monetary policy actions before i turn to the central bank ’ s monetary policy actions, i would like to reiterate the major changes made over the past year to the bank ’ s monetary policy decision making framework. these were as follows : • inclusion of two external members on the monetary policy committee, to ensure that the mpc benefits from specialized expertise and diverse viewpoints in its policymaking deliberations. • changing the mpc meeting frequency from once a month to every two months to give the mpc a better opportunity to fully consider economic and financial conditions, including important issues and policy alternatives ; and • communication of the bank ’ s monetary policy decisions, including the setting of the repo rate, to the public in the form of a “ monetary policy announcement ” on the friday evening of the week in which the mpc meeting is held. bis central bankers ’ speeches given the gradual pace of economic recovery and the stability of core inflation, the central bank has maintained a monetary stance geared towards supporting economic activity. this accommodative stance is reflected in the fact that the bank has maintained its policy rate, the repo rate, at a historical low of 2. 75 per cent for the past fifteen months. however, with liquidity levels in the banking system high, the central bank took actions to help curb the excess liquidity. over the first eleven months of 2013, commercial banks ’ excess reserves increased to a monthly average of $ 6. 1 billion, up from a monthly average of $ 3. 6 billion in the corresponding period of 2012. the main source of this liquidity is generated from the financing of the government ’ s net domestic budget deficit. these fiscal injections amounted to