At the beginning of the year 2017, our country faced several challenges and uncertainties. Nevertheless, supported by the proactive stabilisation policy measures adopted by the Central Bank and the government, we have moved steadily towards achieving overall stability of the economy. But we do not want to be complacent with the achievements so far, and we acknowledge that several challenges continue to weigh down on the overall macroeconomic performance of the country. Therefore, we need to work hard in order to restore the stability of the economy on a permanent basis in order to create an enabling environment to raise the living standards of our people, and we believe that the policies outlined in the Road Map will help us in this endeavour. In the meantime, we require broad based reforms and commitment to enhance the country’s growth potential if we are to become an enriched nation as envisaged in the government’s vision. As the agent for macroeconomic stability, the Central Bank will always work hand in hand with the government to enhance economic growth through maintaining low and stable inflation and ensuring financial system stability. We believe that our future policy directions and actions set out in the Road Map will serve as guidance for you to plan ahead and to formulate and align your actions in line with broad policies of the economy. We would also like to note that we will be prepared to introduce new policies and measures not in the Road Map, as warranted by dynamic macroeconomic conditions and market developments.
In the domestic context, the economy continues to face relatively low consumption and private investments and an absent stimulus by the public sector resulting from the orientation of the fiscal policy towards maintaining long-term stability of the public debt. BIS central bankers’ speeches  1  On the other hand, the banking and financial system remains sound and liquid and capital indicators are at relatively satisfactory levels. The activity of the banking sector continues to be strongly supported by the increase of publics’ deposits. Banks have reinforced their capital position to boost resilience against risks arising from banking operations. As at the end of June 2012, the capital adequacy ratio stood at 15.6%. Credit developments, however, remain a problem that is subject to the performance of economic activity and expectations for the future. Slowdown of economic activity and decline of demand for investments and consumption by businesses and households are determinants of private sector credit and credit quality performance. On their side, banks have evidently increased their prudence as regards lending. Periodic stress tests show that the banking sector is resilient and can withstand any adverse events to economic performance. However, we are aware that the banking industry is facing difficult challenges. Besides recovery of economic activity and confidence for the future, improvement of credit quality requires also the completion of legal issues to enable and facilitate collateral execution.