The rise in the consumer price index adjusted for taxes and excluding energy products (CPI-ATE) is projected to moderate, approaching 1¾ per cent next summer. At the end of 2004, inflation is projected at 2½ per cent. The projections for inflation have been revised downwards from the June Inflation Report, as a result of a higher interest rate and a stronger krone. The projections for growth among trading partners have been revised down. We have assumed higher oil prices in light of recent developments. Against this background, the uncertainty surrounding oil prices and global growth is considered to be balanced. Production and demand growth in Norway are projected to be lower and unemployment higher than in the June Inflation Report. We consider the uncertainty surrounding the projections for the Norwegian economy to be balanced. Interest rates were left unchanged at Norges Bank's Executive Board meeting on 30 October. The sight deposit rate therefore remains at 7 per cent. According to Norges Bank's assessment, with an unchanged interest rate, the probability that inflation two years ahead would be higher than 2½ per cent was the same as the probability that it would be lower. BIS Review 65/2002  3  A time horizon of two years when setting interest rates allows monetary policy to contribute to stabilising production. This horizon prevents monetary policy in itself from causing unnecessary fluctuations in the economy. Alternatively, we could have sought to sustain the level of inflation at 2½ per cent six months to a year ahead.

Anita Angelovska-Bezoska: Statistical implications of the new financial landscape Remarks by Ms Anita Angelovska-Bezoska, Vice-Governor of the National Bank of the Republic of Macedonia, at a panel discussion at the 8th IFC Conference “Statistical implications of the new financial landscape”, Bank for International Settlements, Basel, 8–9 September 2016. *  *  *  Contributors to the note: Ana Mitreska and Maja Andreevska. Since the burst of the crisis, central banking community has been providing unprecedented monetary stimulus with a view of influencing financial conditions and thus reviving the growth. The measures have gone far beyond the pre-crisis mode of operation. If conducting a monetary policy in the pre-crisis period seemed like steering a ship with rudder being enough powerful to protect against the waves, the waves that emerged in 2007–2008 were too strong and reliance only on the traditional instrument posed a risk of sinking. Thus, when the central banks approached/reached zero-lower bound, they were compelled to start experimenting with new policy tools such as balance sheet policies, forward guidance and in more recent period, even more extremely, with negative policy interest rate. Has this monetary accommodation served the purpose of influencing the financial and economic conditions? While there is ample evidence that the measures have succeeded in influencing financing conditions, so far there is not strong empirical evidence on their impact on output and inflation. In fact, despite the ample liquid and ultra-low interest rates, the output growth remains weak and inflation stubbornly low pointing to a weak monetary transmission mechanism.