Given its size and its traditional low volatility vis-à-vis the DM, the market for Swiss franc denominated assets does not offer an attractive way to counterbalance the risks born by large holdings of key currencies. Our currency is thus less demanded as reserve currency and less involved in speculative capital movements. This is basically good news for the Swiss economy. 3. ... and what about the future? What conclusions can be drawn from the past? Will the Swiss franc remain stable vis-à-vis the euro, or will we see a more independent development of our currency? Again, the answer to this question will depend crucially on economic fundamentals in Switzerland and in the euro-zone. In both areas, the economy is now recovering from the recession, following a steady upward path. The expected growth rates for this year amount to 2.2% for Switzerland and 2.9% for the euro-zone. The central question  BIS Review 17/2000  2  for the exchange market is to what extent the economic upturn could endanger price stability, and what kind of central bank’s reaction can be expected. 3.1  Uncertainty about lasting convergence in European and Swiss fundamentals  While Europe is now growing faster, it still suffers from an unemployment rate of roughly 10%. At first sight, one might think that this big labor reservoir would allow the economy to grow without tensions on the labor market and without large wage adjustments. Inflation would remain subdued, and there would be no need for an all too restrictive monetary policy.
Generally, Macedonian economy has been relatively successful in offsetting the crisis consequences which was mainly due to the solid initial conditions prior to the crisis without massive macroeconomic imbalances, the establishment of few new production capacities based on foreign capital that largely contributed to the export diversification, stable and sound financial system and adequate macroeconomic policy mix. The environment for monetary policy implementation in 2013 is quite favorable, considering relatively stable inflation developments and comfortable foreign reserves level. In the first half of 2013, the average inflation was 3.6%, mainly due to higher food and energy prices. Our latest forecast for the average inflation rate in 2013 is 2.8%, with expected further slowdown to 2.3% (close to our historical level) in 2014, until when no pressures of higher significance by the demand side are being expected. However, there are risks related to this forecast, reflecting the uncertainty about energy prices as well as the world and domestic food prices dynamics and their direct and indirect pass-through to inflation. The performances in the external sector in the first several months of 2013 and the latest estimates indicate quite favorable position in the balance of payments for this year. The reduced trade deficit is neutralizing the lower net inflows through private transfers. Therefore, the current account deficit in 2013 is expected to remain moderate at 4.2% of GDP, which is similar to the previous year.