In cases where the “forward-looking formation mechanism” prevails in a sufficiently strong manner, even if the observed inflation rate somehow deviates from the price stability target either upward or downward, people expect it to revert to close to the 2 percent target in due course, and prices and wages are set based on such expectation.
First, we will improve cross-border trade facilitation under the current account while reform of the foreign exchange sector will move ahead to streamline administration, delegate power, improve regulation and upgrade services; and a foreign exchange supervisory system will be established, which focuses on credit risk assessment and ex-post verification.