  Exchange rate depreciation is the major fall in the New Zealand TWI from March 2008 to March 2009.   Very stimulative monetary policy refers to the major reduction in OCR from 8.25 per cent to 2.5 per cent followed by a conditional undertaking to hold the rate low.
The risks include down-turn in the global economy that could hurt our exports, increase inflation pressure arising from domestic demand pressure related to the PNG LNG project and managing the impact of this project on the economy. The significant foreign exchange inflows expected from the PNG LNG project will add to the already high liquidity levels in our banking system.