Although credit and debit cards are the most important means of payment among the general public, cash (banknotes and coin) is still an important payment instrument and has actually gained in importance in the recent term. For a long period, cash in circulation amounted to less than 1% of GDP, whereas it now totals roughly 2½%. Price level developments and the increase in cash in circulation give cause to consider the need to issue a new banknote with a higher face value. The Central Bank has therefore begun preparing for the issue of a new 10,000 kr. banknote that will be equipped with better and more numerous security features than its predecessors. In appearance, the new note will be similar to the others in use, and the graphics will be related to the poet Jónas Hallgrímsson. The bill will also feature the plover. It is planned that the new banknote will be put into circulation in the autumn or early winter of 2013. On this occasion, and because we are faced with a large array of complex tasks, as I have mentioned in my speech today, I think it is appropriate to close with a poem by Jónas Hallgrímsson, which I interpret to mean that challenges like those ahead of us certainly require organisation and forethought. We can only cross the river where it is possible to pass. But to make the crossing we also need determination and courage. In Jónas’ words: The cliffs on life’s swift current are cleft by shallow valleys.
End-year Inflation Target and Annual CPI Inflation (Percentage Change) 35 Annual Inflation  Target  30 25 20 15 10 5  Jan-06  Sep-05  May-05  Jan-05  Sep-04  May-04  Jan-04  Sep-03  May-03  Jan-03  0  Source: TURKSTAT. However, the sole reason for the realization of inflation above the path consistent with the end year inflation target in the first quarter of the year is not the said base effect. When the contribution of subitems to first quarter inflation is analyzed, it is observed that the course of prices of unprocessed food products, which increased beyond expectations, tobacco products and services played a leading role in the said rise. Nevertheless, high-rated seasonal discounts in clothing prices due to demand and competitive conditions limited the increase in consumer price inflation (Graph 2). 2  BIS Review 67/2006  Graph 2. The Contribution of Sub-items to First Quarter Inflation (Point) 1.41  1.5  2005  2006  1.0 0.64  0.51  0.5  0.39  0.26 0.06  0.30  0.20  0.04  0.01  0.31  0.21  0.0 -0.5 -1.0 -1.18  -1.5 Food and Nonalcoholic Bev. Alcoholic Bev. Tobacco  -1.36  Clothing and Footwear  Housing  Restaurant and Hotels  Other Subgroups  Source: TURKSTAT, CBRT. Dear Guests, Classifying goods and services group, price increases in goods group gained pace, while the services group inflation declined, except rents item, in the first quarter of 2006.