The first formal interest rate decision date next year will be Thursday, January 26. Icelandic economic conditions at any given time broadly correspond to what is going on elsewhere in the world. However, occasional tasks can differ and call for specific measures. This is what we see from the Central Bank of Iceland’s policy rate at the moment. It is not reflected anywhere else. The explanation is that the picture in Iceland is unique, and maintaining a low and stable inflation rate in the current climate would widely be thought an ambitious aim. First, the largest single investment programme in Iceland’s history is now under way, and Landsvirkjun and its foreign business partners are by no means the only investors planning major projects. Second, we are simultaneously experiencing the largest-ever overseas expansion of the Icelandic banking system, which has accumulated foreign debt on an unprecedented scale with accompanying capital inflows. Third, the Icelandic credit market has been sharply transformed, with an open invitation for everyone to join in. Fourth, tax cuts have been implemented or announced for the coming months. And to add the icing to the cake, wage earners are compensated for the inflation caused by the broad rise in their house prices which has taken place at no cost to them. This is the climate in which we aim to ensure that medium-term inflation will obey the principles set for it in the Central Bank Act and the joint declaration by the Central Bank and Government of Iceland.
Treasury markets comprise a wide range of products including foreign exchange, fixed income, derivatives and so on. The boundaries between various markets have become blurred alongside more innovative and sophisticated structuring of new products. Whether dealing, sales or back-office staff in treasury markets all require strong technical, up-to-date knowledge in order to cope with the rapid changes in treasury markets. In the discussions between the Treasury Markets Forum and ACI - The Financial Markets Association of Hong Kong on the design of the new membership scheme, we consider that there is a need to bring together qualifying practitioners from various treasury markets. This can facilitate the exchange of views among practitioners within the industry on the one hand and promote the professional standing of practitioners on the other hand. In addition, accredited educational programmes should be introduced to raise the professionalism of practitioners and provide training to those who are interested to join the industry. Following the active co-ordination among industry bodies, I am glad that the ACI - The Financial Markets Association of Hong Kong has successfully launched the new membership regime and made a major stride in raising professionalism of treasury market practitioners. While ACI - The Financial Markets Association traditionally is composed of professionals in foreign exchange market, today, it has expanded the membership to those engaged in other treasury markets (such as bonds and derivatives), encompassing dealing, sales, broker and back-office personnel.