Further, while rising energy prices may be an exogenous shock for several countries, for the global economy as a whole it is endogenous. Sixth, terms-of-trade losses due to soaring commodity prices not only reduce the capacity of a re-balancing of the world economy but also impact several countries in different ways but essentially in an adverse fashion.
New asset classes that the Bank has begun to invest in include covered bonds and mortgage-backed securities and we have recently began trading in bond futures to mitigate the potentially negative impact of rising bond yields on the reserves as well as for more efficient portfolio management.