16 percent trimmed mean and exclusion method ) also registered an upward trend. rising inflation, both domestically and elsewhere, is attributable mainly to the international price of oil - based products and food. in botswana, inflation for the category of the consumer price index that includes petrol rose from 2. 9 percent in september 2007 to 56. 1 percent last month in june, accounting for about three - quarters of the total increase in headline inflation. food price inflation has remained more stable but high, while for most other items inflation has remained much lower and generally within the medium - term objective. in june, there was some indication of a more widespread acceleration of prices which could, in turn, indicate the emergence of second - round effects. pressures from domestic demand abound, as indicated by growth rates of credit and government expenditure, as well as strong output expansion. the real growth of gdp in 2006 / 07 is estimated at 6 percent, while more recent estimates indicate that economic growth excluding mining and government accelerated further in the second half of 2007. monetary policy implementation in the first half of 2008 for the first four months of 2008, the bank rate, which had last been changed in june 2007, was at 14. 5 percent. at the time, while a short - term deterioration in the outlook for inflation was anticipated, the medium - term projection indicated a sustained improvement. it was also appreciated that there were upside risks arising from the escalating food, fuel and other administered prices, as well as the impact of a wage - induced increase in demand. hence the bank ’ s monetary policy committee concluded that the bias was towards monetary policy tightening going forward. subsequently, it was clear from the bank ’ s analysis that the outlook for inflation had deteriorated, with revised forecasts estimating annual inflation to peak at a higher level than previously indicated. hence the successive increases of 50 basis points each in may and june brought the bank rate to 15. 5 percent. it is widely believed that interest rates have only a limited influence on domestic demand in botswana, as borrowers appear not to respond to interest rate changes. this is based primarily on the observation that growth in bank lending has remained high, despite high interest rates. this argument is weak in several respects, as it does not acknowledge factors such as income growth and the broadening reach of the banking sector, both of which should be expected to encourage more borrowing. even if borrowing was unresponsive to interest rate changes, it goes without saying that increased costs of

zdenek tuma : eu enlargement and monetary integration remarks by mr zdenek tuma, governor of the czech national bank, at the 3rd ecb central banking conference “ the new eu member states : convergence and stability ”, frankfurt, 21 - 22 october 2004. * * * ladies and gentlemen, it has been only recently since we had become members of the european union. it is only natural that, once the immediate effects of the enlargement have subsided, policy - makers´ attention should shift towards the next step - monetary integration of the twenty - five current eu member states. the first thing to be considered when discussing european monetary integration is how the different countries will go about adopting the euro. there is no universal strategy that can be used by all new eu member states. the euro may either be adopted rapidly, or after a longer interim period. in the pre - emu period, the emphasis can be put either on ensuring the low inflation required by the maastricht treaty domestically, or on importing it by fixing the exchange rate. the key factors that determine which strategy to adopt are, in my opinion, the size and flexibility of the domestic economy, the current monetary - policy regime and its credibility as well as the state of public finances. specifically, small countries that have lived with fixed exchange - rate regimes for the last ten years, and have thus developed economies flexible enough to compensate for fixed exchange rates will most likely benefit from faster adoption of the euro. they are also likely to rely on importing price stability from abroad during the interim period. larger countries that have invested heavily in developing a credible independent monetary policy but still have more to do in the area of fiscal policy reforms and flexibility of domestic economies, will probably opt for a more cautious approach. they are likely to prefer avoiding double regime switches, opting instead for a smooth and fast transition from the current regime to euro adoption. the czech republic belongs to the latter group. the czech strategy for euro adoption is based on a cautious timescale. in the pre - emu period, we want to ensure low inflation domestically, not by importing it. in the strategy, we have pointed to the years 2009 - 10 as the most likely entry date. in comparison to other new eu member states, this timescale had been viewed as relatively cautious. however, it should be said that other countries in the region have recently pushed back their initially more optimistic estimates. the primary reasons for this more