You will recall that two years ago, the Bank adopted a new forward-looking monetary policy framework which rightly expects policy effectiveness in the medium-term. The framework is based on a model of inflation forecasting which incorporates a wider set of economic indicators. Indeed, with the benefit of continuous technical refinements, the actual domestic inflation has broadly been in line with the model projections.
Before I present the Monetary Policy Statement for 2010, I consider it useful to restate the other core functions of the Bank which, when taken together, provide synergies for monetary policy, for the promotion and maintenance of monetary stability, and for the efficiency of the payments system as well as the soundness of the financial sector.