But a big and persistent shift in relative prices, which is what the terms of trade shift amounts to, was always going to produce some such effects. A further difficulty in assessing the exchange rate’s level lies in that very persistence. The relationship between the exchange rate and the terms of trade has, broadly speaking, continued to hold (Graph 5).
Remittances performed exceptionally well last year and reached a new record of $ million. Nonetheless, our overall external position remained stable and foreign reserves was recorded at $ billion at the end of last year, sufficient to cover 4.9 months of retained imports of goods and non-factor services. Ladies and gentleman, what is in store for us in 2014?