However, while the hope that a depreciation of the franc will boost export opportunities is understandable, it is deceptive all the same. On the one hand, the exchange rate is only one of the factors determining export success. Exports do not only depend on price elasticity, but also on their income elasticity, i.e. the cyclical development abroad. On the other hand, as I have pointed out before, it is the real rather than the nominal exchange rate that matters for production  BIS Review 60/2002  5  decisions and trade flows. It is well known that monetary policy cannot manipulate the real exchange rate for any length of time. Expanding the domestic money supply until the Swiss franc was depreciated to the desired degree would inevitably lead to a massive rise in inflationary risks. As a consequence, the SNB would no longer be able to fulfil its mandate of ensuring price stability. In the long run, such a policy would result in the well-known costs of rising inflation without any compensating real benefits. Moreover, if the SNB tied the Swiss franc to the euro, as some calls from the industry and the unions have demanded, a first consequence would be the erosion of the "interest rate island". One can only begin to imagine what this would mean for the Swiss financial centre, the building and construction industry, or Swiss asset prices.
BIS Review 128/2010  3  Custodian of the Two Holy Mosques The endorsement of the Ninth Development plan coincided with the announcement by the Central Department of Statistics and Information of preliminary results of the population census. The population of the Kingdom amounted to 27.1 million, of whom about 18.7 million are Saudis, and 8.4 million are residents. The number of houses stood at 4.6 million. These results support your Royal instructions to exert every effort to achieve the objectives of the Ninth Development Plan in a timely manner, especially with regard to enhancing citizens’ welfare, providing housing, employment, education, health care services, and modern facilities needed, and working hard to fight poverty, paying special attention to balanced development in all regions of the Kingdom. At the regional level, the four member states of the GCC Monetary Union (Bahrain, Saudi Arabia, Qatar and Kuwait) have ratified, at the beginning of this year, the convention of the Monetary Union. By your Royal encouragement and support and that of your brothers the leaders of the Council’s states, the Monetary Council began its work as the nucleus of the central bank to be established upon the completion of the main facilities and infrastructure of the Monetary Union. The central banks and monetary agencies, members of the Monetary Council, are doing their utmost to conduct the Council’s work in accordance with the guidance of the leaders of the Council’s States. In spite of these bright achievements, there are still many challenges posed to our development march.