”, summary of a speech given by toshihiko fukui, governor of the bank of japan, to the japan chamber of commerce and industry in tokyo on 16 march 2006. woodford m. “ for not only do expectations about policy matter, but ( … ) very little else matters. ” – interest and prices : foundations of a theory of monetary policy, princeton university press, 2003. been followed recently by the norgesbank 21. at first ( since 2003 ) the norwegian mpc published its monetary policy intentions only for the next four months in the form of an interest rate forecast interval. last november it went further and started publishing a forecast for interest rates three years ahead in the form of a central forecast ( with two alternative scenarios ) along with a fanchart ). these bold steps made new zealanders and norwegians push the frontier of central banking ahead and set a new benchmark for inflation targeters 22. are we ready to follow? in 2000 mahadeva and sterne measured central banks transparency 23. back then the polish central bank was below the average among inflation targeters. however since then the nbp has made considerable progress. major changes to communication have been introduced such as publication of inflation forecasts, modification of inflation reports and decision statements in order to make them more forward - looking. łyziak et al. have applied the mahadeva - sterne and eijffinger – geraats indices to assess current transparency of the nbp and showed that it has markedly improved 24. nevertheless, we are not resting complacently. there are still ways to go and things to learn. later today marek rozkrut will present results of an empirical study conducted at the nbp 25 showing that central bank communication strategies in the czech republic, hungary and poland exhibit large differences. the czech national bank seems to do a much better job than the other two banks in matching words with deeds. there is also some evidence that pursuance of too many targets under it framework leads to inconsistencies also in central bank communication, as in the case of the hungarian national bank. finally, to those of you, who intend to adopt it in the future let me say one last thing. a standard view is that it should not be introduced unless a number of criteria are fulfilled. as piotr szpunar will tell you in the first presentation, at the time poland adopted it one could claim we were not ready

. real rates decreased from 3. 0 to 1. 7 in the same period. this in turn helped to accelerate credit growth and fuelled asset bubbles. the amount of loans granted to households increased 3. 5 times since 2004 and almost 10 times since 2000. low deposit rates and economic upturn in cee after eu accession encouraged both financial institutions and individuals to move toward more risky forms of investment. as a result, real estate prices soared after 2004 and equities listed on stock exchanges reached historical highs. since 2003 major stock exchange indexes in cee increased on average by almost 300 percent. while part of this asset price and credit growth may be explained by structural factors often referred to as “ convergence ”, the observed rates of growth are clearly unsustainable and they contribute to economic imbalances. with the benefit of the hindsight one could argue that monetary policy in the last few years did not properly take into account the possibility that prolonged period of historically low interest rates may contribute to asset bubbles and hence contribute to greater inflation see imf czech republic, estonia, latvia, lithuania, hungary, poland, slovenia, slovakia. volatility in the future. as argued by rogoff ( 2006 ) when faced with a tail wind monetary authorities in both developed and developing world should have temporarily lowered the inflation target rather that reduce interest rates too much for too long. but there is another issue. it seems that globalisation tail wind is reversing these days and that in the coming few years central banks can face “ globalisation headwind ” amid rising food and energy prices. 1. agflation is the rise of inflation due to increase of food prices. in recent months we have witnessed a significant increase of food prices, grain and oilseeds being the leaders. prices of food products on international markets has risen by almost 40 per cent within last two years and prices of grain and oil seeds has almost doubled within this period. many forecasters suggest that this trend will not end in the nearest future. there are several explanations of such situation. firstly, rising oil prices increase demand for alternative sources of energy, biofuels being high on the agenda in many regions. in effect industrial demand for food commodities will further rise. by the way, it is worth to mention what may be the ecological consequences of growing biofuels production. spiegel online on 26th september 2007 described a research led by the nobel - price winning chemist paul crutzen which had found that biofu