heavily influenced by the inflation experience in one ’ s own lifetime, which implies that decades of too low inflation can become embedded in expectations. indeed, we have seen some worrying signs of a deterioration of measures of longer - run inflation expectations in recent years, as seen in table 2. importantly, this sustained undershoot of the inflation target is likely to be a recurring dilemma for the fed and central banks in japan and europe that have had similar experiences over the past decade. this problem of inflation running chronically below the target stems in part from the limited ability of central banks to offset economic downturns due to the lower bound on interest rates in a low - neutral - rate environment. 7 implications for the monetary policy framework the risk of the inflation expectations anchor slipping toward shore calls for a reassessment of the dominant inflation targeting framework. 8 a number of alternative frameworks and strategies have been proposed that hold the promise of better achieving the inflation goal and holding fast the inflation anchor. 9 in this regard, i am very pleased that the federal reserve is undertaking a review of our policy framework this year, a topic that federal reserve vice chairman clarida will discuss in his lunch remarks today. in summary, the phillips curve is alive and well. i wholeheartedly agree with the authors that we 3 / 4 bis central bankers'speeches must not be complacent about inflation expectations becoming unmoored, whether at too high or too low a level. see john c. williams, inflation persistence in an era of well - anchored inflation expectations, federal reserve bank of san francisco economic letter 2006 – 27, october 13, 2006. 2 see more amazon effects : online competition and pricing behaviors, jackson hole economic symposium conference proceedings ; federal reserve bank of kansas city, 2018. 3 see alan s. blinder, economic policy and the great stagflation, academic press, 1979 4 see tim mahedy and adam shapiro, what ’ s down with inflation? frbsf economic letter 2017 – 35, november 27, 2017, and andrea tambalotti, stefano eusepi, and bart hobijn, condi : a cost - of - nominal - distortions index, american economic journal : macroeconomics, 3 ( 3 ) : 53 – 91, july 2011. 5 see james h. stock and mark w. watson, slack and cyclically sensitive inflation, working paper. 6 see ulrike malmendier and stefan nagel, learning from inflation experiences,

- based approach to increase flexibility and effectiveness of implementation ; and support for optimal supply and demand of foreign exchange. in line with these initiatives, as well as the continued national economic recovery and the increasing need for hedging on securities holdings, average daily dndf transaction volume increased from usd99. 1 million in 2021 to usd112. 7 million in 2022 ( as of november 11, 2022 ) - ( graph 23 ). meanwhile, bank indonesia continues to expand the use of the lcs, including through the establishment of the national lcs task force in may 2022, as a form of synergy and national commitment to accelerate the use of the lcs. furthermore, we also expanded the scope of lcs cooperation with thailand by including dndf in the cooperation. the lcs framework was also strengthened and developed into local currency transactions ( lct ), which include not only current account transactions but also capital and financial account transactions, including as a transaction settlement mechanism in the context of implementing cross - border qr code cooperation ( qris cross - border ) with thailand and piloting with malaysia. these various measures supported an increase in lcs transaction volume from an average monthly amount of usd211. 2 million in 2021 to usd354. 0 million in 2022 ( as of october 2022 ) – ( graph 24 ). graph 23. daily average dndf transactions graph 24. lcs monthly volume usd million usd million 112. 7 99. 1 211. 2 1 2 3 4 5 6 7 9 10 11 12 1 2 3 4 5 6 7 9 10 11 daily average volume daily average volume 2021 daily average volume 2022 ( up to 15 nov 2022 ) source : bank indonesia 354. 0 bank indonesia continues to develop financial instruments as a source of economic financing and to strengthen risk management in synergy with the financial sector authorities and market players. synergy in the coordination forum for financing development through financial markets ( fk - pppk ) was strengthened, among others, through the development of asset securitization with underlying lending / financing for msmes, the development and piloting instruments of sustainable financing and derivative transactions ( environmental, social and governance / esg ). the synergy was also strengthened by developing programs to expand retail investors through the financial literacy education program ( like it ), which this year focused 1 2 5 6 7 8 9 10 11 12 1 2 malaysia thailand monthly average total volume 2021 source : bank indonesia 5 6