Thus, even if the inflation rate rose, it would be largely superficial and gross domestic income (GDI) as well as gross national income (GNI) would decrease; as a result, people would not feel that the economy had overcome deflation (Chart 16).
In sum, although the impact of developments in exchange rates on prices is substantial, pursuing a high price stability target of 2 percent solely through the exchange rate channel is not a balanced option. What should be aimed for is a rise in prices that accompanies an increase in income.