The peso/dollar parity, with ups and downs, is somewhat lower than in the previous Monetary Policy Report, while the real exchange rate (RER) has shown no significant variation. The Board continues to estimate that, with the prevailing nominal exchange rate and currency parities, the RER is in the lower part of the range of values consistent with its long-term fundamentals (figure 3). In the baseline scenario, y-o-y CPI inflation will stand below the tolerance range in the coming months, to start rising later and approach 3% by the end of 2013 and over the projection horizon, this time the last quarter of 2014. There are several factors explaining the lower figures foreseen for the near future, including the high basis for comparison of late 2011 and the turn of 2012. Core inflation will post y-o-y variations below 2% over most of 2013, then it will rise gradually to near 3% over the course of 2014 (figure 4). This path assumes that wages will grow in line with productivity and target inflation. In addition, it relies on the methodological assumption that, over the projection horizon, the RER will be fairly unchanged from its recent values. Finally, the baseline scenario uses as a working assumption that the MPR trajectory will be stable, as suggested by the latest surveys available at the statistical closing of this Monetary Policy Report (figure 5).
This is important because it shows that there is another less-explored way in which central banks can effectively contribute to fostering financial integration: identifying the policy issues where the input from research is welcome and providing researchers with a forum where they can debate their ideas among themselves and with policy makers who, if convinced, will be in charge of carrying them forward. I am sure that the presentations and discussions during the course of this conference will provide central bankers with fresh and high-quality material which will be useful to us in finding the most efficient way to foster financial integration without jeopardising our objective of promoting financial stability. I sincerely hope too that this conference will encourage researchers to go on working on these and other related areas in the coming years, thereby rapidly filling the current gap between the policy relevance of the questions posed and the availability of profound analytical and empirical research to substantiate the possible answers. I would like to end my intervention by thanking the organisers for gathering together such an impressive group of researchers and policy makers, thanking the audience for their attention and wishing you all a fruitful exchange of ideas and a pleasant stay in Madrid. Thank you very much. 4  BIS Review 118/2006