For those smaller economies like New Zealand and Australia which are facing relatively strong inflation pressures at present, that would ordinarily make the monetary policy challenge harder. On the other hand, higher credit spreads are actually increasing the effective cost of funds for many of our financial institutions and businesses accessing funds through the global capital markets.
So we actually face some quite difficult judgements in assessing how policy settings and global conditions will affect domestic economic activity and inflation in the months ahead. Despite increased global risk aversion, it is not yet evident that the carry trade is dead. We have still seen a relatively strong issuance in the New Zealand dollar in recent months via Uridashi bonds for example.