1/3  BIS central bankers' speeches  External debt as a proportion to the country’s GDP increased to 24 percent in the first semester of 2019. Despite this moderate uptick, external debt-to-GDP has remained below 25 percent since 2016. Our financial system remains sound and continues to effectively intermediate funds to productive sectors, thus promoting economic growth.
In addition, monetary policy needs to address higher inflation and is in a process of normalisation. Higher inflation puts pressure on central banks to raise interest rates to keep inflation expectations anchored. Appropriate buffers thus need to be available within the financial system. This requires effective stress testing and a strong capital base – including by building up micro- and macroprudential buffers.