expected outcomes, we note that this should not be interpreted as, nor convey the message that, the fund ’ s recommendations are always correct or that member countries ’ authorities always take a defensive attitude. we believe deeply in a policy dialogue process that could be beneficial to both parts. at the end, successful policies are those implemented by economic authorities that feel them their own and are capable to create the political framework for their execution. we also support a more systematic focus of the fund ’ s surveillance on regional developments by detecting regional trends and fostering dialogue with region - wide institutions such as eclac. along these lines, we appreciate the fund ’ s regional outlook report, whose last issue was simultaneously launched in mexico city and santiago in early november. as a central bank fully committed to an inflation - targeting framework, we place substantial weight on making continuous efforts in strengthening transparency. in this direction, we think that the fund ’ s communication strategy would be more effective if analysis goes beyond the mere publication of reports, making it an integral part of the public debate on policies and economic reforms. considering the importance of communications, we believe that enhancing the fund ’ s outreach activities both at global and regional level will strengthen the effectiveness of the fund ’ s monitoring and surveillance. the risks the world economy faces in the medium term - associated to an abrupt resolution of global imbalances, a commodity price downturn, a slowdown of global growth, or an abrupt shift in risk perception and valuation by global investors - require that the agenda on international financial architecture be focused more on preventing, rather than resolving crises ex post. as countries are progressively more integrated into a more global financial system, new challenges emerge for economic authorities. the increased mobility of international capital flows - beyond their potential benefits - entails the risks of sudden and unexpected reversal of capital flows that could be further worsened by the contagion associated to the financial market reaction. also, in the current market - driven international environment, characterized by increasing access of emerging economies to private funding, and by a more complex international financial system, externalities, market failures and perverse incentive effects are still in place and impede private financial flows to become a permanent and stable source of financing. therefore, strengthening countries ’ resilience is not only about developing and improving appropriate and consistent policies and institutions, but also about providing countries with access to emergency liquidity and the possibility to obtain short - term liquidity by private financial instruments. the fund should therefore play a leading role in facilitating

costs associated to this type of intervention. a first cost is that it may create confusion as to the objective of the monetary authorities : inflation or the exchange rate. in our case, we have dealt with this through transparent mechanisms whereby we anticipate the amounts and terms of interventions, and by maintaining a flexible exchange rate. in addition it has always been clear that the exchange rate is not an objective and the main goal of the central bank is price stability. a second cost is of a financial nature. foreign reserves are invested in highly liquid and secure instruments of developed countries, whose interest rates are lower than those of domestic instruments used to finance their acquisition. conversely, the benefits of having these reserves are the enhanced security they provide in case of an abrupt cut of external financing. these benefits are hard to measure, but it is reasonable to expect that they will decline as the availability of reserves increases, as has been occurring in chile since 2008. allow me to express some final thoughts. final thoughts news during these last weeks have led us to a scenario in which the effects of the deteriorating external situation that we forecast some time back are not evident and in which inflationary pressures stemming from a higher cost of energy have resurfaced. hence, if a few months ago it was clear that the most likely scenario for monetary policy in emerging economies was a further loosening, today it is much less clear so. compounded to it is the renewed influx of capital flows towards emerging economies and the resulting appreciation of our currencies. against this backdrop, managing monetary policy has become more complex. today, our assessment continues to be that the crisis in the developed world will sooner or later affect the performance of our economies. it is possible that the impact will be less than what we thought some time ago, but to assume that nothing will happen does not seem sensible. nonetheless, the difficulties involved in measuring the actual impact makes me very cautious in measuring the impulse required by each economy to offset the effects of the external scenario. today, prudent monetary policy management has to be prepared for all kinds of scenarios and to adapt the amount of stimulus applied according to needs established on a case by case basis. as i said a moment ago, activity we see today is at a level above what we bis central bankers ’ speeches forecast a few months back. in fact, in our latest monetary policy meeting we decided to maintain the monetary policy rate at 5 % for a second month in a row. the current situation in developed economies