Even in the aftermath of the earthquake and tsunami of February 2010, Chile rapidly returned to a path of sustained growth, with an unprecedented recovery of employment, and unwavering strength. All within a context of low inflation, despite the international price shocks. Monetary policy has given practical proof that it can act with flexibility and determination, and be resolute in attenuating the effects of the external cycle on our economy. As I said, at three years after the outbreak of the crisis we are still enduring its consequences. Chances are, its reverberations will continue for a while longer. The task of monetary policy is to preserve its necessary capacity to react in difficult times, the same capacity it has displayed to withdraw the stimulus packages in due time and prevent costly adjustments later. The Board will continue to fulfill its legal mandate of safeguarding price stability and the normal functioning of the payments system. Accordingly, it reaffirms its commitment of conducting monetary policy with flexibility, in order for projected inflation to stand at 3 percent over the policy horizon. An environment of low inflation improves households’ welfare, particularly those less capable of protecting themselves from rising prices. Furthermore, keeping inflation low and stable permits to soften the fluctuations of output and employment, which contributes to the people’s well-being. Chile must continue on a path of growth that will ensure continual progress of the living standards of its inhabitants. The world, including our country, is living a decisive moment.
Figure 2 Global imbalances, current account balances (Billions of dollars) 1,200 800 400 0 -400 -800 -1,200  96  97  98  99  00  01  US Japan Emerging Asia Oil exporters Other prima and goods exporters  02  03  04 05  06 07(e)  Euro area Latin America  (f) Forecast. Source: International Monetary Fund. BIS Review 124/2008  9  Figure 3 Real price of housing (*) (IT01=100, index) 200  200  180  180  160  160  140  140  120  120  100  100  80 01 02  03 04  05 06 07  Australia US (2) New Zealand  08  80 01 02  03 04  05 06  Spain Germany Denmark  US (1) UK (3)  07 08  Ireland France Austria  (*) Nominal index deflated by CP1. (1) OFHEO. (2) S&P/Case-Shiller. (3) Nationwide. Sources: BIS y CEIC Data.