The specification of a target range for CPI inflation should be the main focus of the Policy Targets Agreement (PTA). It’s important that the PTA also recognise that several factors can cause inflation to move outside the target range and require the Bank to provide analysis and explanations in the Monetary Policy Statement when this occurs.
During the same period, the JP Morgan Emerging Markets Currency Index declined 17 percent, a significantly smaller drop than the 29 percent decline between mid-2014 and early 2017. This round of currency depreciation in emerging economies is relatively small, and there are three main reasons. First, the foreign exchange reserves of emerging economies have continued to grow, offering a thicker buffer against capital outflows.