to withstand adverse events through stress tests. in any case, the shift in the external scenario will have an impact on the local economy. as foreseen in the central scenario of this mp report, projected growth in the united states and europe will be negatively affected by lower credit expansion and greater global uncertainty. this effect will be most visible in the second half of 2023 and early 2024. for these years, growth in those developed economies that are chilean trading partners is expected to average 0. 4 %, which compares with the 0. 7 % forecast in december ( figure 10 ). emerging economies will face tighter financial conditions, which will also affect the external demand relevant to chile. the better outlook for china after its reopening, together with the evolution of the copper and oil market balances, has been behind the improvement in our terms of trade, which are revised upwards from the last mp report. this combines the better outlook for copper prices and lower projected prices for foods and fuels. for copper, our projected prices for this and the next two years are increased. we foresee an average price of 3. 85 dollars per pound in 2023 ; 3. 65 dollars per pound in 2024, and 3 and a half dollars per pound in 2025. oil prices have been quite volatile due to the tensions in the financial markets in recent weeks and their possible implications for world growth. in addition, inventories have been accumulated and opec has recently announced production cuts. in the central scenario, the average brent - wti price is projected to gradually decline from 73 dollars per barrel in 2023 to 67 dollars in 2025. however, the lower growth of our trading partners will gradually reduce the external demand faced by chile, which will be more noticeable from the second half of this year onwards ( table 1 ). the chilean financial market has followed the global market trends. particularly, the local fixed - income market showed important drops in the rates of sovereign bonds, in addition to allowing the placement of bank and corporate debt. while these developments are positive, it is important to note that the depth of the chilean capital market has been significantly reduced in recent years. for the same reason, a relevant factor for the resilience of the chilean economy is to ensure that this market is not affected again. projections in the central scenario, headline inflation is projected to continue to decline in the coming quarters and to converge to the 3 % target in the latter part of 2024. inflation will end 2023

to alleviate exchange rate tensions. we remain committed to a floating exchange rate system, and the exchange rate will keep floating during the intervention period. for an economy like chile, which can encounter significant changes in external financial conditions and in the terms of trade, foreign exchange flexibility is an essential ingredient of its macroeconomic and financial stability. within a volatile environment like that of the past few years, the inflation targeting regime with a floating exchange rate has displayed its benefits in terms of allowing a smoother trajectory of the chilean economy. our floating regime admits interventions in exceptional situations, like the one announced at the beginning of the month. nonetheless, it is important to consider that beyond the evolution of the dollar in international markets, there are some more long - lasting elements underlying the real appreciation of the peso, such as improved terms of trade, the accumulated increase in the ratio of public expenditure to gdp and the reduction in our net debtor position relative to the rest of the world. the effects of these factors on the real exchange rate and the competitiveness of some sectors goes beyond the horizon of the effects of this intervention. those sectors need to improve their productivity and reallocate their exports to growing emerging markets in order to remain competitive. in any case, additional reserves available will allow to better deal with the contingency of a significant deterioration of the external environment. foreign exchange markets are under stress and currencies are adjusting asymmetrically. there is also the risk that gdp growth decoupling between advanced and emerging economies will persist longer than expected, thus intensifying the pressure on the exchange rate. accordingly, the effects of this measure, although temporary, should open room for smoother real adjustments in the domestic economy. final thoughts and challenges the ability of macroeconomic policies in developing economies to react swiftly was essential to reduce the impact of the global crisis. the answer of monetary and fiscal policies and a sound and well regulated financial system were key factors in the ability to withstand and recover from all the hard times we have had to face in the last few years. the chilean economy has picked up strongly. expansionary policies applied have paid off. the current recovery process has posed two main challenges to emerging market economies. the first one has to do with the appreciation of currencies and the resumption of capital inflows. and the second, with the need to control inflation in an environment of rising commodity prices. bis central bankers ’ speeches massive capital inflows are not a problem in chile