Inevitably, the process of unpicking and understanding shocks and complex interactions affecting the economy is an ongoing task. And that raises the challenging question of how the monetary policymaker should respond to this changing environment. Clearly we need to be sure that the analysis underpinning policy decisions incorporates an appropriate understanding of the complexities of our global system.
To date, there has been no complete reversal of this process. The opposite effect was observed during the debt crises in Greece and Cyprus. Mistrust in the stability of the euro led to falls in international demand for the currency between April 2010 and March 2013. Since then, however, there has been a steady upward trend again.