2  BIS Review 20/2009  The external position continues to be strong. As of end January, the country’s international reserves registered almost $ billion, equivalent to six months’ of imports of goods and service and three times external debt based on residual maturity.
The second reason why a 2% objective helps absorb shocks is that it supports the implementation of monetary policy in adverse conditions. A small positive buffer creates more scope to support the economy through cutting nominal interest rates and reduces the likelihood of running up against the effective lower bound.