Our liaison contacts and others in the business community have certainly seen the effects of this. Shipping costs are up sharply, and so are some other costs (Graph 4). It is hard to know how long these disruptions will last. Many countries are still contending with outbreaks that are constraining output.
Additionally, the likelihood of financial instability can increase if many central banks react in the same way. Another option in the same group is to enforce explicit capital controls, including restrictions on portfolio investment and short-term debt. Some emerging economies have used these measures with various degrees of intensity, but, in general, on a temporary basis since they have noteworthy limitations.