3 On the one hand, it is argued that the presence of foreign banks in the region has ensured the availability of credit to the real economy and improved the efficiency of financial intermediation process. In addition, the lending activities of foreign banks appear to be more resilient to local shocks than those of domestic banks.
Monetary policy is intended to affect future developments: Policy has channels of relatively rapid effect (the exchange rate), and some of the others have a slower effect (for instance, the price of credit). In any case, an important component in the formulation of policy is the forecast, since monetary policy is, of course, forward looking.