dialogue with the public to promote understanding of the importance of the 2 percent target. in january 2013, the bank judged that setting the 2 percent price stability target was important for the economy. this judgment took into account, for example, ( 1 ) the scope needed to avoid another deflationary period, ( 2 ) the scope needed for the conduct of flexible monetary policy in normal periods to avoid the zero lower bound in the recessionary phase of the economy, ( 3 ) the upward bias in the cpi statistics, and ( 4 ) the need to align with the global standard of a price stability target. moreover, achieving sufficiently high nominal gdp growth rates is essential for the economy to boost firms ’ and households ’ economic growth expectations. in japan, the majority of households continue to view price rises as unfavorable. this implies that the importance of achieving the 2 percent target may not be widely understood and shared by households. thus, it is vitally important for the bank to clearly explain to the public and respond to questions as to why the bank aims to achieve the 2 percent price stability target and how this will improve daily lives in the medium to long term. this is particularly important given that a consumption tax hike is scheduled in april this year, and the inflation rate may temporarily exceed 2 percent, together with the effects of monetary easing. communication about the 2 percent pinpoint target some argue that the bank should adopt an inflation target range, rather than an inflation target point. i believe that the bank should maintain the current inflation target point ( that is, 2 percent ). the idea of applying a range to the inflation target should not be ruled out and bis central bankers ’ speeches might be examined after the actual inflation rate exceeds at least 1 percent in a stable manner and after it is judged that inflation expectations are likely to rise toward 2 percent. however, the premature introduction of a range may result in the actual inflation rate getting stuck at the lower bound of the range, making it harder to achieve the 2 percent target. a more important concern in this case is that the markets and the public may mistakenly assume that the bank ’ s intention to achieve the target has weakened, undermining the credibility of monetary policy. communication on achieving the 2 percent target in a stable manner lastly, the expression “ in a stable manner ” contained in the second description of the bank ’ s forward guidance may give the impression of ambiguity in terms of its description of the conditions. this expression, however, appears to be appropriate at

technological advances, we must continuously upgrade our currency to adapt to the new standards. for instance, our banknotes must be of the quality and specifications for use in automated tellers machines ( atms ). our banknotes must therefore be able to be used by humans and machines alike. the on - going design changes to our currency are not only in accordance with one of our legislative objectives of promoting an efficient payments system but is also recommended and acceptable practice for currency issuers ( usually central banks ) at certain intervals over time to introduce new designs and features into their banknotes to combat and prevent counterfeiting and to keep abreast of technological advances. the central bank is committed to ensuring our currency is of the highest standards and quality, is safe and secure and is widely acceptable and convenient to use. we are in the process of introducing an automated currency processing system to improve on our counting, sorting and online destruction of soiled banknotes initially in port moresby and eventually to our currency distribution centres in mt hagen, lae and kokopo. this will ensure that under our clean banknote policy we will maintain the standards and quality of our banknotes in the hands of the public. i wish to appeal to the general public and business houses to assist us improve the quality of our banknotes in circulation by returning old and torn banknotes to any of the commercial banks in exchange for new notes and coins. the next major shift in our banknote history was the introduction of the “ parliamentary ” theme on the front of the notes. the parliament already appeared on the k10 and k50 also has the portrait of sir michael somare who brought a united papua new guinea to self government in 1973 and eventually independence in 1975. in 2005, the bank of papua new guinea undertook a review and modification of the design and upgrade the security features while retaining the traditional flavour of the original banknote designs. in re - designing our currency, we re - emphasized nation building and nationhood and hence the family of banknotes depicting the national crest which is the stylized bird of paradise sitting on a kundu drum and the ceremonial spear and the national parliament which already appears on the front of the k2, k10, k50 and k100. the designs on the back of the notes remain unchanged. i wish to acknowledge the role of the security / banknote printers we have been associated with. we deal with de la rue for paper banknotes and note printing australia limited for polymer ( plastic ) banknotes