2  BIS Review 54/2001  It is in three respects that financial market prices are particularly valuable for monetary policymakers. First, they provide us early on with leading indicators as to market expectations about macroeconomic developments. For example, changes in the term structure of interest rates relate to future economic growth. A steepening of the yield curve typically forecasts stronger economic growth.
Moreover, there is a greater transparency in the forex price discovery and the market seems to take the JISDOR onshore fix as positive. 13. This positive development in the forex market microstructure certainly help alleviate the past perception where the central bank was perceived as the sole main supplier of US dollar.