While inflation has remained elevated and is likely to stay above 2% for some months to come, inflation rates are expected to decline further in the course of 2012 to below 2%. A cross-check with the information from our monetary analysis confirms that the underlying pace of monetary expansion continues to be moderate. After today’s decision, inflation should remain in line with price stability over the policy-relevant horizon. Owing to their unfavourable effects on financing conditions and confidence, the ongoing tensions in financial markets are likely to dampen the pace of economic growth in the euro area in the second half of this year and  2  BIS central bankers’ speeches  beyond. The economic outlook continues to be subject to particularly high uncertainty and intensified downside risks. Some of these risks have been materialising, which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012 very likely. In such an environment, price, cost and wage pressures in the euro area should also moderate; today’s decision takes this into account. Overall, it remains essential for monetary policy to maintain price stability over the medium term, thereby ensuring a firm anchoring of inflation expectations in the euro area in line with our aim of maintaining inflation rates below, but close to, 2% over the medium term. Such anchoring is a prerequisite for monetary policy to make its contribution towards supporting economic growth and job creation in the euro area.
It has been the endeavour of this report to propose a type of central bank which, with proper skill and understanding in its management, will establish monetary conditions in Ceylon that may make possible, as never before, the fuller use of the nation’s human and material resources and a rising standard of comfort for all.” History has judged us before! I will leave it up to you to judge us in future as well! Bibliography Bernanke Ben S. and Michael Woodford (eds), The Inflation Targeting Debate. Cambridge Massachusetts: National Bureau of Economic Research Studies in Business Cycles, 2005. Bernanke, Ben S., Thomas Laubach, Frederic S. Mishkin, and Adam S. Posen (eds), Inflation Targeting. Princeton: Princeton University Press, 2001. Blinder, Alan, Central Banking in Theory and Practice, Cambridge Massachusetts: The MIT Press, 1996. Central Bank of Sri Lanka, 40th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-1990. Colombo: Central Bank of Sri Lanka, 1990. Central Bank of Sri Lanka, 60th Anniversary Commemorative Volume of the Central Bank of Sri Lanka, 1950-2010. Colombo: Central Bank of Sri Lanka, 2011. Central Bank of Sri Lanka, Annual Report. Various Years. Central Bank of Sri Lanka, Road Map: Monetary and Financial Sector Policies, Various years. Colombage, Sirimevan, The Political Economy of Central Banking in Sri Lanka. Prof. H. A. de S. Gunasekera Memorial Oration, University of Peradeniya, October 2017. 23  Government of Ceylon, Sessional Paper XIV: Report on the Establishment of a Central Bank for Ceylon (Exter Report). 1949.