All in all, we have come to the assessment that the risk spectrum is neutral; we see equally large risks for a lower inflation path than in our main scenario as for a higher path. Repo rate lowered 0.25 percentage points The Riksbank's total assessment is that inflation measured at the rate that has guided policy in recent times, UND1X, will be slightly lower than the target level one to two years ahead. However, the picture is more complicated than this. Despite the fact that this indicates the repo rate should be lowered, the decision has not been a simple one. This is because one important reason for inflation being lower than the target level one to two years ahead is that electricity and oil prices are expected to fall back from their current high levels and it is not certain this fall in prices will affect policy. When adjusted for energy prices, inflation is expected to be in line with the target two years ahead. The forecasts of inflation presented in the Inflation Report provide scope for lowering the repo rate by 0.25 percentage points. This was also the decision taken by the Executive Board of the Riksbank yesterday. An important circumstance that affected the decision is that the unease and uncertainty in the global economy risk leading in the short term to a much worse development in economic activity than described in the main scenario.

R&D is indeed an essential aspect of modern industries and enterprises and is no less the case in the financial world. There are three important pre-requisites in strengthening research and development capabilities, namely, adequate allocation of resources for infrastructure development, forging strategic alliances through smart partnerships and developing the required pool of qualified and skilled talent. Adequate allocation of resources for infrastructure development Islamic financial institutions are continually being confronted with new challenges that need to be addressed. Their institutional capacities and capabilities need to be continuously strengthened. This includes attention to continually review their strategic orientation and key priorities and the necessary adjustments that need to be made to position the institutions to effectively respond to the new developments and challenges that have emerged. In order to meet the increasing demands of a modern and sophisticated market, financial institutions must continually invest in the supporting infrastructure that promotes research and development. This will enhance the capacity for innovation. Attention also needs to be given to the applied approach to Islamic finance and its modern practice. Financial support for advanced research at universities and research institutes will increase research opportunities. Efforts to utilise and install strong technological capabilities will also contribute to enhance research and development. In embracing the new leadingedge technology, the potential for the Islamic financial industry to develop new products and services will also be enhanced. Forging strategic alliances through smart partnerships To further enhance research and development (R&D) activities, the promotion of strategic alliances through smart partnerships can play an important role.