for as long as needed, and at least until the end of the second quarter of 2014. the fixed rate in these special - term refinancing operations will be the same as the mro rate prevailing at the time. furthermore, we decided to conduct the three - month longer - term refinancing operations ( ltros ) to be allotted until the end of the second quarter of 2014 as fixed rate tender procedures with full allotment. the rates in these three - month operations will be fixed at the average rate of the mros over the life of the respective ltro. third, the governing council decided to start consultations with other european institutions on initiatives to promote a functioning market for asset - backed securities collateralised by loans to non - financial corporations. in the meantime, it is essential for governments to intensify the implementation of structural reforms at national level, building on progress made in fiscal consolidation and proceeding with bank recapitalisation where needed. furthermore, they should maintain the momentum towards a genuine economic and monetary union, including the swift implementation of the banking union. let me now explain our assessment in greater detail, starting with the economic analysis. real gdp contracted by 0. 6 % in the fourth quarter of 2012, following a decline of 0. 1 % in the third quarter. output has thus declined for five consecutive quarters. overall, labour market conditions remain weak. recent developments in short - term indicators, notably survey data, bis central bankers ’ speeches indicate that weak economic sentiment has extended into spring of this year. looking ahead, euro area export growth should benefit from a recovery in global demand and our monetary policy stance should contribute to support domestic demand. furthermore, the improvements in financial markets seen since last summer should work their way through to the real economy. at the same time, necessary balance sheet adjustments in the public and private sectors will continue to weigh on economic activity. overall, euro area economic activity should stabilise and recover gradually in the second half of the year. the risks surrounding the economic outlook for the euro area continue to be on the downside. they include the possibility of even weaker than expected domestic and global demand and slow or insufficient implementation of structural reforms in the euro area. these factors have the potential to dampen confidence and thereby delay the recovery. according to eurostat ’ s flash estimate, euro area annual hicp inflation was 1. 2 % in april 2013, down from 1. 7 % in march. this decline in the annual inflation

##minbi was added to the sdr basket. we made our first actual investments in 2014, following two years of preparations. i consider this to be our early contribution to the increased international role of the renminbi. dear colleagues, there are two main reasons why we decided to “ go to china ”. first, quite obviously, we were attracted by the higher yield offered by renminbi - denominated bonds – particularly given the low interest rate environment that we live in. and, second, the renminbi market also offered us new opportunities for much - needed portfolio diversification, as renminbi yields have little correlation with global yield movements. 1 / 3 bis central bankers'speeches in 2012 – 2014, there were two possible paths for us to enter china ’ s onshore market. the first was using the qualified foreign institutional investor scheme, or qfii. the second avenue was via bilateral agreements with the pboc. the bank of lithuania chose the qfii pathway. we liked that qfii status memorandum of understanding opened doors for china and lithuania - based investors to invest in the respective markets. moreover, the qfii scheme offered larger investment scope, including the possibility to trade equities onshore. such opportunity was itself very attractive – once you take the long - term perspective into account. indeed, we saw our investments in china as a strategic, long - term exercise. given this long - term horizon, the fact that the qfii scheme provided limited possibilities to repatriate our investment capital was not a big issue. since then, we have accumulated crucial know - how in managing the renminbi portfolio. this know - how has been recognised by the ecb as well. during the first half of 2017, the ecb invested in the renminbi an equivalent of eur 500 million of its foreign reserves. since the first quarter of this year, we, together with banco de portugal, are the sole active managers of the ecb ’ s renminbi foreign exchange reserves, managing the portfolio on a day to day basis. i consider this to be a significant recognition of the level of competence and experience in our institution. dear colleagues, since the beginning of its engagement in china ’ s onshore market, the bank of lithuania has been running the renminbi portfolio in a manner that embodies long term, conservative and low volume trading philosophy. our renminbi holdings currently stand at around 2 % of our financial