In China, for example, the share of its exports to the US in terms of the growth of its overall economy has fallen by half (Figure 6). In any case, we must consider that certain automatic stabilizers are at play. For example, the reduction in external demand induces a depreciation of the currency of the economy facing higher tariffs, making its products relatively more competitive. Conversely, in the economy imposing the tariffs, an appreciation of the currency should be observed. Except if this appreciation compensates the increase in tariffs, the higher prices of imported goods would temporarily push inflation up. In the case of the US, this greater pressure of imported costs would be added to the scarce gaps that the economy already presents, which could lead to greater current-account imbalances, higher inflation and additional pressures to speed up the pace of monetary normalization. Special attention deserves the effects on financial markets and asset prices, especially in circumstances where the Fed continues to progress in normalizing its monetary policy. The uncertainty associated with the trade conflict contributes to reducing risk appetite, making capital flow out of emerging economies. So far, this adjustment has been selective and major effects have materialized in only a few vulnerable economies. For an economy with good fundamentals, such as Chile, one possible risk comes from a synchronized adjustment of emerging economies’ asset prices, as it happened in the late 1990s or during the Global Financial Crisis.
These include, among others, the delivery of new statistical products, improved management of the cash cycle, modernization of the technological platform that supports the investment cycle of the International Reserves and the Sovereign Funds, and the incorporation of computer security measures based on high international standards. Particularly noteworthy is the progress we have made in implementing Basel III regulations, mainly in terms of liquidity standards for the banking system and support for the discussion of the new General Banking Act. The latter will pose additional demands, particularly concerning the implementation of regulatory measures and macroprudential policies, such as the countercyclical capital reserve and the charge to systemic banks, for which the CBC has been preparing in recent months, reviewing international experiences and their applicability to Chile. 11  We intend to continue informing the Senate and the general public about the progress of our Strategic Plan and the operational agenda in the coming years. This is an expression of a broader will to increase the transparency of the operation and performance of the CBC, as an essential ground for the confidence in our institution that we wish to maintain and reinforce. Let me stress here that the CBC’s commitment with transparency involves not only compliance with the obligations mandated us by the Constitution and laws but has expanded further by way of agreements adopted by the Board throughout the years.