excluding food and energy componentes — inflation, in turn, will approach 3 % in the first half of 2019, to later stay in the neighborhood until the end of the projection horizon ( figure 8 ). monetary policy about monetary policy, the same as in september, the board considers that the evolution of macroeconomic conditions makes it necessary to gradually withdraw the current monetary stimulus. key in this judgment is our assessment of the size of the capacity gaps compared with the magnitude of the monetary stimulus : while the former has decreased, monetary policy is still very expansionary. the baseline scenario uses as a working assumption that the monetary policy rate will continue to rise in the coming months to approach its neutral level of 4 % to 4. 5 % in the first half of 2020. the board has stated that it expects to adjust the mpr in a gradual and prudent manner. in particular, the implementation of monetary policy will be conditional on the effects of incoming information on the projected inflation dynamics, making the necessary adjustments to policy measures if faced with significant deviations in either direction. risk scenarios as usual, there are internal and external elements that may alter the projections i just presented you. like in the past several quarters, the risk balance of the external scenario relevant to chile remains biased downward. the main risk continues to be a drastic deterioration of financial conditions facing emerging economies, which could result from some of many elements. on one hand, whatever happens in the us is important to us, because of its effects on inflation as well as its monetary policy and economic outlook. on the other hand, major geopolitical risks persist. the trade conflict has tended to refocus on the us versus china, in a context where the chinese economies have activated several stimulus measures, but financial risks remain while the economy rebalances. in any case, the meetings held by the two nations during the g - 20 convention seems to indicate that this conflict will not escalate any further, at least for some time. in europe, the uncertainty surrounding brexit and the complex situation in italy has taken on greater force. finally, although we believe that the drop in the oil price responds primarily to supply - side factors — which reduces short - term inflationary pressures — it remains to be established to what extent this could be reflecting more permanent demand - side factors. recent months have seen a substantial adjustment in financial asset prices in the developed world that could be signaling a change in risk premiums, consistent with a scenario of uncertainty that

continue to recede to 4. 6 % of gdp. the international economy is undergoing a normalization process that influences the chilean economy. this means a lower external impulse, with more balanced world growth between developed and emerging economies, terms of trade approaching their long - term level and global financial conditions more in line with historic patterns. a smaller boost from foreign investment is also to be expected – especially in mining –, which will take pressure off the current - account deficit and the use of internal resources. monetary policy is well equipped, if so required, to back this adjustment process. the board follows closely the evolution of the external and domestic macroeconomic scenario and its implications on inflation, and reaffirms its commitment to conduct monetary policy so that projected inflation stands at 3 % over the policy horizon. i would like to end by sharing with you some final thoughts. final thoughts we have been 19 months with the same monetary policy interest rate. and as with the exchange rate, during this time we have received the most diverse recommendations and suggestions from the market. from taking prompt action to prevent the economy from overheating to acting just as promptly to avoid deterioration. in this dilemma, we have always opted for a medium - to long - run look over the short - term ups and downs, and therefore considered all the risks involved. so far this has allowed us to properly anticipate events and stick to what we believe has been the right monetary policy. the international conjuncture puts us to the test ; we have identified many risks in this area. over the months they have increased in both variety and origins. we know that we are prepared to face them in the best way possible. it is impossible to be immune. in fact, a small open economy like chile is always subject to the vagaries of the international economy : it could not be otherwise. however, policy makers should be able to overcome them without major setbacks. there are also challenges within our borders, especially doubts about the evolution of a number of variables, such as employment and consumption, among others. it is precisely this medium - to long - term vision what helps us not to make hasty decisions. we have said that we are ready to take action if necessary, but overreacting to one particular event would be tantamount to throwing away the well - earned credibility of the central bank, which is a fundamental anchor to achieve our goal of safeguarding the stability of the price level and the financial system. bis central bankers