Their evolution may be a factor affecting the timing and degree of any withdrawal of monetary stimulus. If the Bank were to lean against such imbalances, we would clearly say we are doing so, and indicate how much longer we expect it would take for inflation to return to the 2 per cent target.
If we are asked whether we see a turnaround in the real economy, we can answer that some of the data do present a more optimistic picture. Israel's economy is facing a difficult period, but in the Bank of Israel expectations for six months hence are optimistic. In my two-monthly meetings with other central bank governors, we discuss the economic situation.