to quite low rates of inflation in a range of service industries. increased job uncertainty is likely to be one of the factors here, with consumer surveys showing high levels of concern about future unemployment. the third general point is that despite the transmission mechanism looking somewhat different, monetary policy in australia is still working and it is helping to support the australian economy. the area where this is most obvious is in housing construction, where there has been a substantial lift. this part of the transmission mechanism appears to be operating pretty much as normal, with the increase in activity over the past 1½ years being in line with our internal forecasts made in the second half of 2013 when the cash rate was first set at 2½ per cent. this increased activity is boosting employment in the sector and having flow - through effects to spending on homewares and related items. bis central bankers ’ speeches the exchange rate channel of monetary policy is also working. there are some signs that the depreciation of the australian dollar is boosting domestic activity, with net exports of services increasing strongly. also, in our liaison program a number of businesses have reported that they see the lower exchange rate as opening up new opportunities. in time, we should see the effect of this on domestic production and spending. monetary policy is, of course, also working through the other channels that i discussed earlier, even if the effects are somewhat different from those in the past. so, overall, monetary policy is continuing to play an important role in supporting demand in the australian economy. at its february meeting, the reserve bank board decided that it was appropriate to provide some additional support. this was not because things had turned for the worse, but rather because of the lack of compelling signs that economic growth was picking up as was earlier expected. no doubt, the factors that i have talked about today go some way to explaining why this has turned out to be the case. at its meeting on tuesday this week, the board maintained the cash rate at 2¼ per cent, but noted that further easing may be appropriate over the period ahead. finally, stepping back from the short term, the low interest rates we are seeing globally and in australia are a direct consequence of an elevated appetite for saving and a muted appetite for real investment in many economies. monetary policy globally has responded to this reality in a way that a decade or so ago would have hardly seemed imaginable. in doing so it has helped the global economy through a very difficult period. but, at the

in human capital development to support the industry. while malaysia ’ s own experience and aspirations is to evolve into an international islamic financial centre, we also continue to promote a more inclusive financial system to support a more balanced growth. on the international front, the aim is to enhance our international connectivity and thus establish greater economic linkages with other economies. in dubai, the efforts by the authorities to create the islamic economy initiative to further enhance the inter - linkages with other islamic financial centres is also a step towards strengthening the international economic connectivity especially between our regions. the efforts will not only enhance islamic finance as an effective financial intermediary but also as a binding force for the other segments of the islamic economy, including with other parts of the world. our collective efforts in developing islamic finance will provide an important platform to unlock the potential opportunities that lie therein to benefit every segment of the society and the business community that now extends beyond our domestic borders. in this highly dynamic and rapidly changing world environment, efforts will need to be unrelenting on bis central bankers ’ speeches developing further the enabling infrastructure, the foundations for stability and enhancing the internal capability. and with the greater international linkages, the greater will be the importance of working collectively for the common goals we aspire and for which the benefits will be mutually reinforcing. bis central bankers ’ speeches