Nevertheless, the new capital accord establishes risk weights on sovereign claims based on ratings provided by external credit assessment institutions or by internal rating methodologies.
Developments thereafter will be key to the outlook for prices. Based on the economic outlook I outlined earlier, as economic slack dissipates the pace of decline in the CPI will tend to gradually moderate. However, if the pace of recovery in the economy is gradual, we should expect that downward pressure on prices would remain for a considerable period.