speeches foreign exchange reserve management managing our country ’ s foreign currency assets and gold reserves is another responsibility of the reserve bank. today, our foreign exchange reserves stand at nearly us $ 300 billion, up from just a few billion in 1991. an adequate level of foreign exchange reserves is important for several reasons. in particular, it protects us against external shocks and inspires the confidence of foreign investors. in investing our foreign exchange reserves, we are guided by three principles : safety, liquidity, and return. in our investment policy and practice, we exercise utmost care and caution to maintain a high degree of quality of foreign currency assets. in november 2009, we bought 200 metric tonnes of gold from the international monetary fund. this triggered a lot of public and media interest on the rationale of the transaction. in recent years, although there has been significant accretion to our reserves, our gold holdings have remained stagnant. this purchase from the imf helped in raising the proportion of gold in our reserves. secondly, you will recall how, at the height of the balance of payments crisis in 1991, we had to pledge gold to raise resources. in view of the strategic importance of gold as a reserve asset, we exploited the opportunity that came our way to buy a sizeable quantity of gold from a reliable, multilateral financial institution at market prices in a single deal. financial inclusion in recent years, financial inclusion has become one of the top priorities of the reserve bank. we all know that economic opportunity is strongly intertwined with financial access. such access is especially powerful for the poor as it provides them opportunities to build savings, make investments and avail credit. importantly, access to financial services also helps the poor insure themselves against income shocks and equips them to meet emergencies such as illness, death in the family or loss of employment. financial inclusion is good for the poor. but it is also good for the economy as it channels the savings of the poor for productive use. let me just say this : till financial inclusion becomes a reality, we have not conquered the final frontier of development. despite all the progress we have made in other spheres, our performance on the financial inclusion front is disappointing. more than half the households in the country do not have a bank account, and a larger number of those that do, do not use the banks account in any meaningful sense. of the 600, 000 habitations in the country, only 30, 000, or just 5 % have access to a bank

opinion survey indicates that, while the absolute level of lending standards remains tight, banks did begin to ease standards somewhat in the second half of 2010. the pick - up in the economy has occurred despite renewed weakness in the housing market. home prices have softened anew and construction activity remains stuck at a very low level, likely reflecting the continued large supply of unsold homes. we believe that it will take more time, perhaps as much as another year, for enough of these homes to be bought that residential construction might begin a meaningful recovery. on the labor front, the most recent employment report for january 2011 is quite difficult to interpret. only 36, 000 nonfarm payroll jobs were added, well below expectations. yet, we get a very different perspective from the unemployment rate, which fell by 0. 4 percentage points for the second month in a row and now stands at 9. 0 percent. job growth was undoubtedly held down by the severe winter storms that affected many major cities, including our own. bis central bankers ’ speeches the decline in the jobless rate was not an unmitigated positive, as a significant part of this decline was due to fewer people looking for work. thus, neither the disappointingly slow job growth nor the welcome steep drop in unemployment seems to paint the full picture. the truth lies somewhere in between. despite the stronger job growth that we expect in the months ahead, we will continue to have a substantial amount of slack in our labor markets that will take time to absorb. at this point, while the soft patch is over and the risk of a double dip has subsided, the economy still faces headwinds as a result of the aftermath of the financial crisis, the housing bust and the high level of unemployment that still prevails. as banks and other financial institutions seek to strengthen their balance sheets and avoid future credit losses, they may keep credit conditions tighter than normal. in addition, many consumers ’ borrowing options may be limited by their impaired credit histories, and the recovery is not getting the strong boost from home construction that most previous recoveries have benefited from. furthermore, as i will discuss later, households are still feeling the financial impact of lost wealth and jobs, which makes some cautious about spending and investing. the economy is healthier, but it is not yet well. in order to reduce joblessness significantly over the coming quarters, the economy needs to grow at a considerably faster rate than we have seen so far in this recovery. i am happy to say