tony latter : hong kong's currency board today - the unexpected challenge of deflation speech by mr tony latter, deputy chief executive of the hong kong monetary authority, at the conference on " alternative exchange rate regimes in the globalised world ", organised by eesti pank to mark ten years of the currency board in estonia, tallinn, 11 june 2002. * * * the conquest of inflation those of us here today who once studied economics almost certainly did so in a period of at least mild, if not quite rapid inflation. and those of us who are central bankers have for the majority of our working lives been struggling to cope with inflation. so it's hardly surprising that back in 1983, when the hong kong authorities pegged the hong kong dollar to the united states dollar, we didn't seriously contemplate any deflationary scenario. the us inflation rate in the early 1980s was averaging some 4 % pa and, not possessing any special forecasting capability in this field, we must have reckoned that it would remain near that figure. in addition, the textbooks would have told us that structural and developmental factors would tend to make hong kong's inflation rate somewhat faster than that of the us - as indeed it was for the ensuing fourteen years. neither a significantly lower rate of us inflation nor a situation where hong kong's rate was significantly below the us rate would have been considered at all likely. yet hong kong now finds itself with a consumer price level that is 12 % below the peak of four years ago, and with a gdp deflator some 15 % below its peak and 22 % lower relative to that of the us than it was four years ago. what is the explanation, and can one live with this? there is general consensus, supported by both recent imf analysis and research conducted within the hkma, that hong kong's deflation is predominantly cyclical. i shall return to hong kong in a minute, but let me first dwell for a moment on the global slowdown in inflation. over the past four years the rate of consumer price inflation has averaged 2. 5 % in the usa, only 1. 7 % in euroland, minus 0. 3 % in japan, and minus 0. 3 % in mainland china. in six other economies of east and south - east asia taken together, the inflation rate fell to 2. 7 % on average in these four years as against 4. 4 % in the preceding four. this widespread slowdown in

jean - pierre roth : the position of the swiss franc exchange rate in the swiss national bank monetary policy strategy summary of a speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank and chairman of the board of directors of the bank for international settlements, at the university of st. gallen, st. gallen, 19 december 2007. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * the exchange rate is an important factor in determining the domestic price level in switzerland. nevertheless, it is not a monetary policy goal for the swiss national bank and is only relevant insofar as it has an impact on future inflation. our concerns about our currency's weakness should not be read as a hidden form of exchange rate policy but rather as genuine concern about future price stability. a sustained tendency to weakness on the part of the swiss franc could trigger inflationary effects that – sooner or later – would have to be countered with monetary policy instruments taking the form of interest rate measures. in the medium - term, this could lead to a reduction in the interest spread between the swiss franc and the euro.