the euro area with persistently high unemployment, which curbs wage rises and weakens demand and price growth. moreover, structural factors, such as the ageing population, are also likely to exert downward pressure on the “ natural ” – or “ wicksellian ” – interest rate. this rate can be defined as the interest rate consistent with the full employment of the factors of production. in this case, in order to achieve the right balance between savings and investment, markets rates must come down too. in normal times, central banks cut their key rates, and this passes through to the yield curve. however, in order to deal with the financial crisis, the ecb like other central banks have brought their key interest rates to very low levels, around zero. this means that our traditional monetary policy tools had to be supplemented by other instruments, known as non - standard instruments, in order to reach our prices stability objective. i will return to this point later. b ) what is more with regard to the challenges we currently face, these deflationary pressures create the risk of an unanchoring of expectations, which would make it harder for us to achieve our 2 % target again. indeed, if inflation stayed too low for too long, economic agents may revise downwards their inflation expectations, which would create second round effects. lower inflation expectations influence economic agents ’ price - and wage - setting behaviour, which in turn keeps inflation low. it can even raise the risk of deflation, defined as a cumulative process of falling prices, including those of assets, or even wages and production, as the world economy experienced in the 1930s or japan partially underwent in the 1990s. such deflationary dynamics are not at play today. but this risk is the bis central bankers ’ speeches reason why our inflation target is symmetrical. we consider too low inflation to be just as costly as too high inflation. and, therefore, it is more risky for central banks to act too late than too early. since the start of the year, we have observed that market - based measures of inflation expectations have fallen. nevertheless, the latest forecasts provided by the ecb continue to point to a gradual rise in inflation over the coming years : 0. 1 % in 2016, 1. 3 % in 2017 and 1. 6 % in 2018. c ) some argue that these challenges mean that the eurosystem can no longer achieve its price stability mandate. i don ’ t think so. current challenges do not call

custodian system for debt instruments in hong kong, and other custodian systems in the region and international custodian systems such as the euroclear and clearstream. these linkages have been instrumental in fostering cross - border bond trading and investment. with the seamless interfaces between the cmu and the real time gross settlement ( rtgs ) systems in hong kong for the hong kong dollar, us dollar and euro, all transactions in debt instruments denominated in any of these three currencies and under the custodianship of the cmu can be settled in hong kong on a dvp basis in an efficient way. the recent ipo of the bank of china limited is probably a good example to demonstrate the efficiency and robustness of our hkd rtgs system : being a settlement system which typically handles an average turnover of $ 400 to $ 500 billion hong kong dollars a day, it saw a record high turnover of $ 1. 23 trillion on 1 june when the bank of china was listed on that day. notwithstanding such huge amount of settlement, the inter - bank payments were processed smoothly on that day. to further develop hong kong into a payment and settlement hub for the region, we will continue to explore opportunities for linking our rtgs systems and the cmu with similar systems in the region. for example, the hkma has been working with bank negara malaysia for the establishment of a link between the ringgit rtgs system and the us dollar rtgs system in hong kong. this is aimed at reducing the settlement risk of ringgit / us dollar foreign exchange transactions through pvp settlement in the asian time zone. the link is expected to go live by the end of 2006. we are exploring similar linkages with other asian central banks. bond price bulletin one of the factors affecting secondary market activities in the bond market is the lack of information on bond prices. to help overcome this problem, the hkma launched the bond price bulletin at the beginning of 2006. the bulletin provides investors with convenient on - line access to information on bond products and bond prices provided by eight major banks in hong kong. indicative bid / offer prices of over 200 bonds of different currencies issued by both public and private sector entities are provided by the eight contributing banks. outlook let me now turn to talk about the outlook of our debt market. notwithstanding the achievements we have made so far in developing our debt market, we fully appreciate that there is nothing to be complacent