And our efforts in recent years to make the policymaking process more transparent may, almost by definition, have reduced uncertainty and thus compressed risk premiums. We have emphasized the conditional nature of our discussions of future policy to help market participants calibrate their assessments and price risk.
The tight monetary policy stance is expected to be maintained in the first half of 2003, due largely to the following factors: the high underlying inflation rate expected for the December quarter of 2002, and the first half of 2003; the prudent implementation of the 2003 Budget and uncertainties relating to its external financing; and the continued recovery of the world economy and its effect on the international prices and demand for Papua New Guinea’s exports.