as i have already said, we will assess whether these factors become steady against the backdrop of increased inflation expectations. moreover, the influence of demand on prices will also depend on future changes in the epidemiological situation, the pace of recovery processes when vaccines become widely used, and an improvement of consumer sentiment and business expectations. as we could observe in summer and early autumn, when the situation returns to normal, the recovery may be sufficiently quick. at the moment, we consider it too early to adjust our medium - term inflation forecast since it is necessary to also analyse the effect of competing factors on price movements. as regards the near future, our preliminary estimates show that annual inflation will approximate 5 % in 2021 q1. further on, if the influence of one - off factors diminishes rather fast, it will trend down and return to 4 % by mid - 2021. given the accommodative monetary policy pursued, inflation is expected to equal 3. 5 – 4. 0 % by the end of 2021, subsequently stabilising close to 4 %. we will carry out an additional analysis to assess whether there are grounds for adjusting our forecast in february, for the core meeting on the key rate. as regards other risks for medium - term economic development and inflation, their estimate has remained unchanged overall. various geopolitical risks are still relevant — they may provoke fluctuations in financial markets, affect exchange rate expectations and sentiments, and influence trends in the russian and global economies. as always, further changes in budget spending are a critical factor. this has a considerable influence on our monetary policy decisions. there is still uncertainty about the estimate of the pandemic impact on the russian economy ’ s potential, especially amid the current worsening of the epidemiological situation. given such highly uneven trends in the economy and price movements, we will need to carry out an additional analysis of how the situation will be changing and whether we still have some room for cutting the key rate when making our key rate decisions in the future. it is hard to affirm this now. if the impact of one - off factors wanes quickly and inflation expectations reverse, it is entirely possible that there may be grounds for a further reduction in the key rate, yet this will not necessarily be the case. i would also like to emphasise that it is now crucial to maintain the robustness of the monetary policy to various scenarios. our policy is aimed at keeping inflation close to 4 % under any scenario of

have come as a surprise to many that the birth of the euro in january 1999 went so well. indeed, it was a resounding success. the transition to the euro was virtually free of technical faults. we created almost overnight a unified money market, which, despite the formidable transaction overload, functioned smoothly from the very start. short interest rate volatility remained well contained, and the main refinancing operations, along with the standing facilities and the reserve requirement system with averaging provisions, have since guaranteed that money market developments remain closely in line with the ecb ’ s intentions. the arrival of euro banknotes and coins on 1 january this year also went very smoothly. we supplied 300 million people with a new means of payment which in sixty days replaced, without technical failures or psychological regret, currencies that had served for centuries. exchanging the old national banknotes and coins for the new euro denominations was a massive operation requiring enormous technical effort, perfect logistical co - ordination and economic wisdom. its success, again, exceeded the expectations of many - and perhaps even our own dreams. from the outset, the people of europe have been enthusiastic about the euro and have quickly adopted their new money. key factors behind a successful monetary policy but let me move on to my main subject today : the key institutional factors underlying the governing council ’ s policy. i shall also consider the many challenges - in addition to the changeover - which we have faced since the inception of the single monetary policy. first, the well - designed institutional framework of emu was a key factor setting the stage for a successful monetary policy. the treaty establishing the european union assigned to the ecb unambiguous responsibility for the maintenance of a stable scale of value which agents can internalise in their expectations. and it has shielded monetary policy from political interference. price stability diminishes investment risk, reduces the cost of capital and lengthens the horizon over which lenders and borrowers wish to engage in credit arrangements. this multiplies the opportunities for agents to exercise their entrepreneurial spirits, to pursue and spread technological advances and to contribute to the well - being of society at large. technological factors and agents ’ attitudes towards consumption, savings and work combine with government thrift and legislation to determine the real basis for economic well - being. any attempts by a central bank to change this balance of real forces in the short run at the expense of the stability of the currency can only be futile and self - defeating. today