top exporter. [ 13 ] and recent research indicates there is a significant correlation between a country ’ s trade with china and its holdings of renminbi as reserves. [ 14 ] new trade patterns may also lead to new alliances. one study finds that alliances can increase the share of a currency in the partner ’ s reserve holdings by roughly 30 percentage points. all this could create an opportunity for certain countries seeking to reduce their dependency on western payment systems and currency frameworks – be that for reasons of political preference, financial dependencies, or because of the use of financial sanctions in the past decade. anecdotal evidence, including official statements, suggests that some countries intend to increase their use of alternatives to major traditional currencies for invoicing international trade, such as the chinese renminbi or the indian rupee. [ 17 ] we are also seeing increased accumulation of gold as an alternative reserve asset, possibly driven by countries with closer geopolitical ties to china and russia. there are also attempts to create alternatives to swift. since 2014, russia has developed such a system for domestic and cross - border use, with over 50 banks across a dozen countries using it last year. and since 2015 china has established its own system to clear payments in renminbi. these developments do not point to any imminent loss of dominance for the us dollar or the euro. so far, the data do not show substantial changes in the use of international currencies. but they do suggest that international currency status should no longer be taken for granted. policy frameworks for a fragmenting world how should central banks respond to these twin challenges? we have clear examples of what not to do when faced with a sudden increase in volatility. in the 1970s, central banks faced upheaval in the geopolitical environment as opec became more assertive and energy prices that had been stable for decades ballooned. they failed to provide an anchor of monetary stability and inflation expectations de - anchored – a mistake that should never be repeated for as long as central banks are independent and have clear price stability mandates. so, if faced with persistent supply shocks, independent central banks can and will go ahead with ensuring price stability. but this can be achieved at a lower cost if other policies are cooperative and help replenish supply capacity. for example, if fiscal and structural policies focus on removing supply constraints created by the new geopolitics – such as securing resilient supply chains or diversifying energy production

starting domestic demand, by contributing to upholding household disposable income and to improving confidence. among the domestic spending components, mention should be made of household consumption ( underpinned by improved disposable income and by recourse to saving ), the sustained increase in business investment ( driven by brighter final demand prospects ) and the culmination of the sharp adjustment of residential investment, where there are signs of stabilisation. for the first time in the last six years, close - to - zero or slightly positive rates can be observed in the aggregate real estate price indices. lending figures remain in a contractionary phase, in parallel with private - sector deleveraging. but, on the data available, this process is proving compatible with a shift in credit flows towards companies with better output and export prospects and in a sounder financial position. foreign trade flows have undergone quite sharp changes in 2014, brought on by the loss of momentum in our export markets ( most particularly in specific emerging economies and in the eu ) and the acceleration in imports as the recovery took root. as a result, the net contribution of the external sector to gdp has diminished and the pace of adjustment of the external imbalance has slowed. while some of these developments are conceivably temporary, the high cyclical sensitivity of our imports alerts to the need to broaden our export base and to continue increasing the presence of spanish companies in markets with greater growth potential. it is also an indicator of the problems our competitiveness poses not only for exports but also, domestically, with regard to imports. on a par with other euro area countries, spain ’ s inflation rate is trending extremely moderately. in the summer months the year - on - year rate of change in the cpi turned negative ( - 0. 2 % in september ) owing to the influence of temporary factors that affected the prices of unprocessed food and energy products, following marked increases in 2013. that said, core inflation has posted practically zero growth since the start of the year, suggesting there are other, more persistent factors making for a greater sensitivity of costs and prices to the need for the economy to adjust. at the end of the year the inflation rate is expected to return to positive – though very low – values. fiscal policy such is the macro - financial setting in which the state and social security budget for 2015 has been drafted. the scenario is more favourable than in previous years, which should help us to continue the fiscal consolidation process