Interest rates had been very low for more than a decade, and they are still lower than they were before the global financial crisis. The ECB has not been alone in how it has acted. Some central banks started to normalise their monetary policy even earlier, and the exit from the highly accommodative monetary policy has been swifter than was expected. Headline inflation started to come down towards the end of last year, mainly thanks to a decline in energy prices, and it fell to 8.5% in January. More worrying however is that  5/8  BIS - Central bankers' speeches  core inflation has remained persistently high at more than 5%, as the underlying price pressures are not yet receding. The ECB Governing Council consequently announced last month that it will continue to raise interest rates and keep them high enough to bring inflation back to its target of two per cent in the medium term. We also indicated that we intend to raise interest rates by another 50 basis points at our next monetary policy meeting in March. It is most likely this will not be the last rate rise in this cycle, and it is quite possible that interest rates will need to stay high for quite some time so that we can be sure that inflation will come back to, and remain at, close to two per cent.
Let me reiterate facets of the media namely, education and information to which the Bank of Zambia attaches a lot of importance, and forms the guiding principles for the formats of all media seminars Organized by the Bank. We in the Bank believe that an effective or indeed a well informed media is key in the country’s development efforts. It is in this regard that the Bank will continue to work towards the provision of quality information and/or education to the media as evidenced by the continued holding of such seminars coupled with quarterly media briefs. Such efforts as you may be aware are not for our own interests but the Zambian stakeholders. This is as it should be. Distinguished journalists; may I humbly urge you, to actively participate in the deliberations of this seminar. Let me hasten to mention, particularly to those of you that are participating for the first time that you may not be able to completely grasp the materials that will be presented during the seminar. This must not discourage you, as you are free to make followups with the respective departments (and indeed officers) at our offices in Lusaka and our Regional Office here in Ndola. Nevertheless, I am confident that the respective presenters will ensure clarity in their presentations and fully respond to any issues arising there-from. Ladies and gentlemen, allow me, at this point in time to brief you on the performance of the economy in 2006 and the period January – August 2007.