and stable output and employment and to counteracting the build - up of financial imbalances. norges bank sets the key policy rate with a view to stabilising inflation at the target in the medium term. the horizon will depend on the disturbances to which the economy is exposed and the effects on the outlook for inflation and for output and employment. large and sudden outflows of capital are a potential source of instability for small, open economies. large exchange rate movements have at times been a source of instability. in norway, the household, banking and corporate sectors as a whole take on currency risk to a limited extent. furthermore, government finances are solid, and fiscal policy is not affected to any great extent by short - term exchange rate movements. this allows the exchange rate to play an important role in absorbing shocks to the economy. we have thus been able to reap the benefits of an efficient international capital market without having to deal with its challenges. 1 / 3 bis central bankers'speeches at the same time, in a world of high capital mobility and extensive trade, monetary policy ’ s room for manoeuvre is constrained by the exchange rate channel. in a small open economy with a floating exchange rate, the domestic interest rate can differ from interest rates abroad. however, an interest rate differential that becomes too wide can lead to considerable exchange rate volatility, which will in turn feed through to inflation, output and employment. thus, the domestic interest rate cannot be set without regard to the level of external interest rates. the room for manoeuvre in monetary policy is further constrained in periods when external interest rates are close to or below zero. although the financial crisis in 2008 had a marked impact on norway, our economy was affected to a lesser extent than most other advanced economies. there are a number of reasons for this. the norwegian economy was in an upturn when the crisis hit. commodity prices fell, but soon rebounded. norwegian banks were not directly exposed to loss - making financial instruments backed by subprime us housing mortgages. the banks suffered for a short period when international liquidity dried up, but these problems were resolved. in addition, substantial fiscal leeway enabled policy to respond forcefully, allied with a slashing of interest rates, from 5. 75 percent in september 2008 to 1. 25 percent in june 2009. the economy recovered rather quickly, and we did not need to resort to quantitative easing or interventions in the foreign exchange market. when the oil

cannot be achieved if the vision ’ s three core objectives, namely : enhancing financial system stability, efficiency, and expanding financial inclusion are not addressed. • without expanding inclusion to financial services, there is a case for expanding quality access and affordable, appropriate and sustainable financial services and products to majority of the population. this will inevitably increase their access and usage of financial markets and products that will encourage savings / investments and allow capital / asset accumulation. safe havens for savings by the poor reduces their vulnerability to periodic economic and social shocks and enhances their productive capacity. bis central bankers ’ speeches • the three national financial access surveys for 2006, 2009 and 2013 have clearly demonstrated that kenya ’ s financial landscape has changed considerably over the period 2006 – 2013. the financial system is now offering a wider range of financial services and products to more kenyans, covering a wider geographical spread, and even going beyond its borders more than ever before. these developments are attributable to expansions in financial sector infrastructure ( including innovation in products and adaptive institutional outreach ) and advances in technology. ladies and gentlemen : i am delighted to note that we have added the spatial mapping of financial services providers to the finaccess surveys by digitally mapping out all the financial access touch points in the country. this affords us more in - depth knowledge on how to address the challenges we face in expanding financial inclusion and ensure that the majority of our populace access and use affordable, appropriate and sustainable financial services. some of the insights we have gained from the mapping exercise include : • kenya enjoys better financial access compared to countries in the region. the percentage of the population living within a 3km distance of a financial access touch point is 58. 7 % for kenya, 44. 1 % for uganda, 42. 7 % for nigeria and 28. 3 % for tanzania. in terms of financial access touch points per 100, 000 people ; kenya has 161. 7, uganda 63. 1, tanzania 48. 9 and nigeria 11. 4. • financial services touch points tend to be located in economically active regions of the country : more in urban than in rural areas. in these areas use of portfolios of financial services is more prevalent. • financial services touch points locate away from areas of high poverty levels, for instance, 69 % of all financial access touch points are located in areas with the least likelihood of poverty even though only 30 % of the population live in those areas. • kenyans have greater access to mobile phone financial services providers compared