In most economies and occasions, the exchange rate acts as a shock absorber. It helps the economy to adjust to external shocks, reducing volatility in inflation, economic activity and long-term interest rates. This increases the scope for the policy rate to be used independently to influence domestic inflation and output. And it reduces the incentives for excessive foreign currency risk-taking by domestic economic agents, including but not limited to currency mismatches. The latter is key to preserving financial stability.

四、汇率变动引