countercyclical macroeconomic and prudential policies may be relied upon to tackle a slowdown in capital inflows. where there is less room for manoeuvre, tightening monetary and fiscal policies may be required to lower financing needs and attract additional inflows. where foreign reserves are adequate, they may be used to moderate or smoothen exchange rate depreciation. let me now move on to the second point of my intervention : how inflation targeting has evolved in response to the post - crisis global economic and financial environment. the nbr, the same as the central banks of poland, czech republic and hungary, is an inflation targeter. in romania, we have remained loyal to inflation targeting since 2005, but inflation targeting itself is quite different now from 15 years ago. indeed, it is rather difficult to say at present what is left of its underlying principles. the outbreak of the global crisis and the post - crisis developments have naturally led to the tailoring of the strategy to the new realities. some departures from the old orthodoxy are almost unavoidable in 1 / 3 bis central bankers'speeches the present context, marked by a changing global financial and economic landscape. for instance, after the crisis, forex interventions re - entered the arsenal of many central banks, including some of the previously more purist floaters. a case in point is the czech national bank, which resorted to the so - called “ exchange rate commitment ” from november 2013 to april 2017, intervening whenever necessary without time or volume limits to prevent the appreciation of the koruna below a publicly announced floor. i find relevant what agustin carstens, general manager of the bis, said in his lecture held at the london school of economics in may 2019 : “ the textbook version of the inflation targeting framework, which prescribes pursuing inflation stability with floating exchange rates through adjustments of a short - term interest rate, is obviously too narrow for eme central banks. in particular, the financial channel of the exchange rate gives rise to difficult trade - offs for monetary policy, while at the same time complicating the conduct of monetary policy by weakening its transmission. eme central banks have risen to this challenge through their innovative use of additional policy instruments. they have turned to fx intervention to deal directly with the financial channel or insure against undesired exchange rate swings, and to other non - orthodox balance sheet policies as well as macroprudential tools to deal with specific imbalances or vu

the issue of perceived inflation, in contrast to the reality, was also apparent in slovenia, just as it had been in the first wave countries. here slovenia did not fully succeed where others had failed, and thus did not avoid the perceived inflation rate from being higher than the actual rate during the changeover. the perception that some retailers saw the introduction of the euro as an opportunity to put up prices remained. and while this certainly happened in some instances, the statistical evidence shows that this was more the case for services than for goods, although consumers did not make that distinction. i must admit i do not know what the expectations are for inflationary pressures in croatia with the adoption of the euro, so i can only hope that the authorities have managed to combat idea that the introduction of the euro is inflationary. it is a statistical 2 / 6 bis - central bankers'speeches fact that the effect of adopting the euro on inflation was just 0. 3 % points in slovenia, even though public perceptions might have been very different. for a comparison, the introduction of vat in 1999 had significantly stronger effect on inflation, up 2. 5 % points in the first year. turning to a more topical consequence of adopting the euro, this development will further increase croatia's integration with the eu, even though the country had already de facto lost its sovereign monetary policy well before this. this implies that despite a remaining idiosyncratic component, the overall monetary policy will be the same for croatia as it is for other economies in the monetary union. there is a question, of course, of how such economic policies will react to the specific situation in croatia. what we found in these last 15 years in slovenia is that the euro is in fact a good anchor in terms of inflationary pressures. nevertheless, a common monetary policy does constrain the economic policy spectrum, and many, including in the general public, might argue that with the adoption of a single currency an important part of national sovereignty is lost. this is in a way true, but, to be honest, a small open economy cannot act as if it were an isolated island, even if it has its own monetary policy. in reality, however, there are still some economic policies at the disposal of national authorities, some also at the disposal of national central banks, which can be used to help smooth local economic cycles. let me focus next on two sets of policies, macroprudential and fiscal. the experience of the first 20 years of economic