•  In June 2006 the Bank will undertake a review of the liberalization with the aim of fully liberalizing the remaining exchange controls. I intend to immediately allow holders of onshore foreign currency accounts to settle obligations in foreign currency. This arrangement is intended to minimize foreign exchange transaction costs.
I think of this as paying dearly, every day, for insurance against the low-probability risk that another very large macroeconomic shock could occur in the future. Besides, pushing inflation up from 2 per cent to 3 per cent might be quite difficult to do, and might require some significant economic fluctuations, given how well inflation expectations appear to be anchored at 2 per cent.