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Inflation at risk from Covid-19

Summary:
BIS Bulletin  |  No 28  |  23 July 2020 by  Ryan Niladri Banerjee, Aaron Mehrotra and Fabrizio Zampolli PDF full text (918kb)  |  9 pages Key takeaways The pandemic has increased downside tail risks in advanced economies (AEs), while it has increased both downside and upside tail risks in emerging market economies (EMEs). The collapse in output and oil prices, on balance, increases downside inflation risks. Recent exchange rate depreciations increase upside risks to inflation in EMEs. Tighter financial conditions raise both downside and

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BIS Bulletin  |  No 28  | 
23 July 2020
PDF full text
 (918kb)
 |  9 pages

Key takeaways

  • The pandemic has increased downside tail risks in advanced economies (AEs), while it has increased both downside and upside tail risks in emerging market economies (EMEs).
  • The collapse in output and oil prices, on balance, increases downside inflation risks.
  • Recent exchange rate depreciations increase upside risks to inflation in EMEs.
  • Tighter financial conditions raise both downside and upside risks. In AEs, the increase in downside risks is more prominent.

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International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

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