With healthy inflows, the exchange rate is poised to remain broadly stable in the course of the year. The continuing challenges to monetary and banking policies While economic performance appears to be on track, we remain watchful of the potential risks and challenges to the economic outlook.
These risks include the following: (1) volatility in world oil prices; (2) a build-up of excess liquidity in the financial system; (3) possible exchange rate volatility due to excess liquidity; and (4) adverse shifts in the public’s inflation expectations.