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Scenario analysis helps protect policy buffers – panel

Economic thinking and policy-making processes are shifting in face of global shocks, central bankers say

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Central banks can use scenario analysis as a tool to build policy buffers and thereby retain room for manoeuvre, panellists at Central Banking’s Virtual Meetings said on November 10.

Speakers from Africa, Asia and Europe said that using scenario analysis – either to replace point forecasts or supplement them – could help central banks understand the balance of risks to the outlook.

“The aim is to preserve the policy capacity to be deployed through difficult periods so that a temporary shock need

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