By observing the exchange rate, the central bank can thus observe expectations of the future price level. Higher inflation expectations and thereby a higher expected future price level lead then to a depreciation of the currency today, all else being equal. A measure that raises expectations of future inflation and the future price level should thus show up in a depreciated currency. A strengthening of the currency may therefore be ominous and interpreted as a sign that inflation expectations are falling. 11  9  www.rba.gov.au. 10  A well-argued proposal on a combination, a hybrid, between a price level target and an inflation target is presented in Giavazzi, F and Mishkin, F. S. ”An Evaluation of Swedish Monetary Policy 1995-2005”. (2006/07:RFR1), www.riksdagen.se. 11  See equations (8) and (9) and more details in the appendix to this speech. BIS Review 19/2009  5  The exchange rate as a policy instrument – "The Foolproof Way" to escape a liquidity trap The direct link between the current exchange rate and the expected future price level first leads, as mentioned, to the insight that the current exchange rate depends on the expected future price level and can be used as an indicator of the latter. But the link also leads to the idea that cause and effect can be reversed. Instead of the expected future price level determining the current exchange rate, the current exchange rate can determine the expected future price level.
It is important to intervene upstream in the process well before retrenchments take place. MAS  is working with financial institutions to identify early on jobs that might be at risk in the future. We then work with these financial institutions to proactively up-skill these workers through professional conversion programmes. These are all early efforts still and will take time to bear fruit. On the positive side of the jobs equation, we continue to see good demand for professionals in several areas of finance. These include compliance, risk management, insurance underwriting, and asset and wealth 9 / 10  BIS central bankers' speeches  management. Within the technology area, there continues to be strong demand for expertise in cyber security, data analytics, network architecture, artificial intelligence, and machine learning. MAS is working closely with the industry to build the relevant skills and competencies at all levels within our financial institutions. To ensure graduates are job-ready, we are partnering with institutes of higher learning to develop curriculum in new growth areas, for example risk analytics for insurance. To support mid-career finance professionals deepen their specialist skills so that they stay relevant, we have launched the SkillsFuture Study Awards, with a total of 170 awards to be granted this year. To equip capable Singaporeans to take on regional or global leadership roles in financial institutions, we are co-funding leadership programmes at NUS and SMU focusing on international exposure, Asian market insights, and professional networks.