deviation of three - month euribor option - implied density in one year ’ s time ( percent ) 9 / 11 bis central bankers'speeches sources : liffe and bloomberg, ecb calculations. notes : standard deviation of option - implied density of three - month euribor in one year ’ s time. latest observation : 29 october 2018. but let me turn to the next steps for monetary policy in the euro area. the latest surveys of market participants ’ expectations regarding the most likely date for a first rate increase indicate that the “ at least through the summer of 2019 ” formulation has been solidly internalised by market participants. looking ahead, the rotation implies that our key policy rates and forward guidance about their evolution will become an anchor for monetary policy as the end of our net asset purchases is nearing. our communication, and the rate path itself, will be calibrated to ensure that inflation remains on a sustained adjustment path. our policy will remain predictable, and we will proceed at a gradual pace that is most appropriate for inflation convergence to consolidate. in addition, as proved in the past, our forward guidance remains an effective firewall to insulate the euro area 10 / 11 bis central bankers'speeches from unwarranted tightening pressures originating elsewhere. this protection will be crucial to ensure that, as we move along the normalisation path, euro area financial conditions remain consistent with continued progress towards our policy objective. finally, our app portfolio and our unconstrained provision of liquidity will continue, for the time being, to provide an accommodative environment. i would like to make a final comment on the effects of our app portfolio on bond yields. while, overall, our app portfolio will continue to exert downward pressure on euro area long - term interest rates, other factors such as economic fundamentals and the creditworthiness of issuers, as assessed by market participants, remain key determinants of the levels of bond yields and spreads. conclusion the winding - down of net asset purchases is not tantamount to a withdrawal of monetary policy accommodation. the ongoing rotation from net asset purchases towards enhanced forward guidance on key ecb interest rates has preserved the ample degree of monetary policy accommodation that is necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. prudence, patience and persistence will continue to inform our policy decisions. the sizeable stock of acquired assets and the associated reinvestments,

changes that had happened and were happening to the structure of the economy. in addition, it was observed that the changes in monetary aggregates were no longer reliable indicators of current and future developments in inflation. it had also become difficulty to signal the stance of monetary policy, which we believe is critical to anchor inflation expectations. ladies and gentlemen, allow me, on behalf of the board, management, and staff of the bank, and indeed on my own behalf, to recognise the contributions of my predecessors and deputy governors to improving the monetary policy framework over the years and providing the solid foundation for the formulation and implementation of monetary policy comparable to those of other central banks globally. distinguished guests, the mpc formulates the monetary policy of the republic on behalf of the bank and prepares this report. the committee comprises nine members, as prescribed under the act, three of whom should be external and nonpublic officers. so far, eight ( 8 ) members have been appointed, two of these are external. the third external member is yet to be appointed. ladies and gentlemen, you might have noticed that in sharp contrast to the previous monetary policy statements, the statement published on february 14 was very compressed. this will become the norm and is in line with our objective of publishing the mpr, which provides salient detailed information on what informs the decision of the mpc on the policy rate. as earlier indicated, the report presents a detailed assessment of the path of inflation over the next eight - quarters based on a careful and critical analysis of current domestic and global macroeconomic developments. it also provides an assessment of the mpc view on the balance of risks to the inflation projection. our expectation is that such an assessment will help provide greater clarity to stakeholders on the basis upon which the mpc arrives at its decisions. it is also expected that the mpr will serve as a credible and reliable reference document for other economic policy makers, researchers, academics, and the public at large on economic developments in the country. the mpr will be published on the bank of zambia website soon after each mpc meeting. distinguished guests, the monetary policy framework that we are currently using requires a huge amount of high frequency data to gain an in depth and better understanding of recent economic developments and to forecast inflation over a 2 / 3 bis - central bankers'speeches forecast horizon of eight quarters ahead. in this context, the bank has been collecting real sector data directly from firms through the quarterly survey of business opinions and expectations and the credit conditions