trade were rising and inflation was picking up. the very large and rapid easing of monetary policy late in 2008 and early 2009 was a response to a major change in the outlook, which occurred because the “ big forces ” changed direction very quickly, due to the financial events at that time. among other things, this saw strong growth in asia go into sharp retreat, appetite for risk and willingness to lend sharply curtailed and confidence slump. the changes to monetary policy beginning in the latter months of 2009, designed to restore “ normal settings ”, occurred when it had become clear that the risk of a major economic contraction in australia had passed. in fact the “ big forces ” in the expansionary direction had reasserted themselves, after an unexpectedly short absence : resurgent asian growth helped to push the terms of trade to new highs. in that world, leaving interest rates at 50 - year lows would have been imprudent. over the past 18 months or so, policy changes have been much less frequent, but the process of decision making has nonetheless not been dull. a year ago, the then current data on inflation showed nothing particularly alarming. the analysis of the bank ’ s staff suggested, however, that the fall in inflation we had been seeing since 2008 would probably not continue, but instead inflation would probably begin to rise, albeit quite gradually. the board took the view that, on the basis of that outlook and in the circumstances prevailing, it would be prudent for policy to exert some mild restraint, and so it decided late last year to raise the cash rate by 25 basis points. the inflation data for the first half of 2011 do indeed show some increase in underlying inflation ( though after a sequence of revisions, this is not quite as large as it looked a few months ago ). as of may this year, the central forecast was for inflation to pick up further over bis central bankers ’ speeches the ensuing couple of years, eventually rising to be clearly in excess of 3 per cent. this carried a simple message. as the bank said in the may statement on monetary policy : “ the central outlook sketched above suggests that further tightening of monetary policy is likely to be required at some point for inflation to remain consistent with the 2 – 3 per cent medium - term target. ” but there was still a matter of judging how to respond to that message. the board did not tighten policy at that time, nor did it do so three months later when the forecasts for inflation still looked

prudential supervisor myself i find this very important – can contribute to the growth of microfinance by defining clear criteria for microfinance institutions. this pertains in particular to institutions that wish to take deposits from the public or expand their services cross sectorally. and, last but not least, perhaps you yourselves as successful graduates of the roosevelt academy can also make a contribution to the success of microfinance, as future investors, entrepreneurs, or simply by telling others in your environment about the potential of microfinance. the latter can actually prove to be very effective, as you undoubtedly have a bright future as the next generation of influential professionals in our society.