Given that the new method provides sufficient flexibility to build up reserves at times when foreign exchange supply increases relative to foreign exchange demand, The CBRT decided that banks would no more hold option at regular auctions starting from January 3, 2011. Moreover, the daily amount of purchase was raised to USD 50 million in order to avoid a possible sharp decline in CBRT”s foreign exchange purchases due to termination of options. The amount purchased through foreign exchange auctions totaled USD 14.9 billion in 2010. Gross foreign exchange reserves excluding gold amounting to USD 80.7 billion at end-2010, increased to USD 86.2 billion as of March 2011. Distinguished Guests 50. The general framework of the monetary and exchange rate policy for 2011 was disclosed to public by the release of the “Monetary and Exchange Rate Policy for 2011” on December 21, 2010. Accordingly, the CBRT will continue with the inflation targeting and floating exchange rate regimes in 2011. The inflation target for end-2011 has been set at 5.5 percent and the uncertainty band has been maintained at 2 percentage points in both directions. 51. In line with our primary objective of achieving and maintaining price stability, we will continue to monitor macroeconomic risks and financial stability, and hence, take measures towards enhancing the effectiveness of the monetary policy and liquidity management in 2011.
In the most recent Monetary Policy Report published at the beginning of July we were expecting GDP growth in the United States to slow down to around 1.5 per cent a year in 2008 and 2009. I agreed on the whole with the picture of international developments presented in the Monetary Policy Report, but my assessment was that developments in the United States could be even weaker than we were assuming. There is a risk that we will have to lower the forecasts even more in coming reports, particularly the forecasts for 2009. GDP growth in the  BIS Review 100/2008  1  second quarter of 2008 was actually slightly stronger than we had expected. GDP increased by 0.5 per cent compared with the first quarter. Growth in the United States is now largely being upheld by exports alone, which are increasing at a good rate as a result of world growth and the dollar depreciation (compared with the level 2-3 years ago). Domestic demand will on the whole not show any increase in 2008 and 2009. I do not believe that the recovery in domestic demand will get started before the financial system has stabilised and before the fall in US house prices has come to a halt. House prices have continued to fall during the summer. Growth in Europe will also slow down Europe fared better than the United States at the beginning of the year.