raise wages, partly through a base pay rise. upside and downside risks i have explained so far the baseline scenario of japan's economic outlook through fiscal 2018. however, it should be noted that the outlook entails risks, and uncertainty regarding developments in overseas economies warrants particular attention. specifically, first of all, developments in the u. s. economy and the impact of its monetary policy on global financial markets should be noted. the details for economic policy of the new u. s. administration are still uncertain, but it is expected that proactive fiscal measures such as a tax cut and infrastructure investment will lead to rises in the economic growth rate and the inflation rate. in this situation, the short - and long - term interest rates in the united states are expected to rise, and how this affects global financial markets - - including those of the emerging economies - - warrants attention. other risks to which we need to pay attention include ( 1 ) developments in emerging and commodity - exporting economies, particularly china, ( 2 ) the consequences stemming from the united kingdom's vote to leave the european union ( eu ) and their effects, and ( 3 ) prospects regarding the european debt problem, including the financial sector. these risks, if manifested, are likely to have a negative impact on economic activity. however, they could have a positive impact as well. if market participants and economic entities factor the risks in to a certain extent, the confidence in the economic outlook going forward would be enhanced, leading to an upswing in economic activity, when ( 1 ) the view prevails that the actual impact may not be as significant as envisioned beforehand or ( 2 ) the probability of manifestation of these risks lessens. what happened after the referendum on brexit is a case in point. therefore, we should monitor developments in overseas economies with both upside and downside risks in mind. ii. price developments and their outlook price developments next, i will talk about the price developments in japan. almost four years have passed since the bank introduced quantitative and qualitative monetary easing ( qqe ) in april 2013. during this period, japan's price developments have improved considerably ( chart 7 ). since autumn 2014, crude oil prices have declined significantly, pushing down consumer prices. however, looking at the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food and energy, which had been in negative territory for a prolonged period before the introduction

##sequent risk of settlement. so, there was still room for improvement in risk mitigation and making more efficient the post trade process of fx markets. with this in mind, the central bank of chile issued a regulation allowing the creation and operation of clearinghouses to clear payments from spot us dollar - peso fx transactions. thereby, the us dollar and peso payments are now channeled in an orderly, centralized, and safe manner through a regulated payment system. this clearinghouse manages the settlement risk present in these transactions, through a collateral framework and coordination mechanism where the peso leg payment will be settled only if the us dollar leg is settled following the " payment versus payment " ( pvp ) international standard. starting in april 2024, this new clearinghouse, run by a local private institution named combanc, process around 50 % of the transactions of the local fx market, with risk 3 / 8 bis - central bankers'speeches management and liquidity savings benefits for the financial institutions. since payments can be settled in us dollars in the real time gross settlements system as of 2021, this new infrastructure settles its payments in this system, clp or us dollars, respectively. together, the fx clearinghouse and the real time gross settlement system in us dollar provide a sound basis to safe and efficiently support the payments from the market. besides, we recently finished the process of modernizing our fx regulations, which includes granting a broad authorization for the use of our local currency in cross - border transactions, a streamlined process for entities that wish to become part of the formal exchange market, and made explicit a concern for the transparency and access to trading platforms used by its participants, either in chile or abroad, among other measures. all those initiatives have contributed to our infrastructures being well - prepared to manage an increase in the number and amount of fx transactions, but they are not sufficient to increase liquidity and improve price formation in the local fx market. to succeed in that front would require the internationalization of the chilean peso agenda to move forward, for instance through greater participation of non - residents in the market, either as participants or even as trading platforms. we are aware that the cross - border operations with the chilean peso will be still exposed to settlement risk because the local clearinghouse for spot fx transaction only allows the participation of local counterparties. to solve this issue, it is important to move on with initiatives such as the incorporation of the peso in continuous linked settlement system ( cls