we have lowered the monetary policy rate ( mpr ) by 150 basis points, keeping an expansionary bias for monetary policy. this, together with the performance of the internal and external macroeconomic scenarios, has heavily affected the structure of market interest rates. in particular, long - term rates are in or close to their all - time lows ( figure 2 ). i must stress this because long - term interest rates are the ones that most influence investment. what is remarkable is that today they are even below the rates prevailing in 2008 – 2009, that is, even lower than they were at the height of the global financial crisis, when the mpr was down to 0. 5 percent and unconventional monetary stimulus had to be added to the economy. mortgage lending interest rates are also below where they were at the time and very close to their historic lows. at the same time, the lower cost of bank funding has been transmitted to the lending rates faced by firms and households. these rates have fallen by as much as 140 basis points since october last year. however, adjusted for inflation, lending has decelerated, particularly in commercial and consumer loans, influenced by the more cautious behavior of both suppliers and demanders of credit, as is apparent in our june bank lending survey ( bls ) and our august ’ s business perceptions report ( ipn ). the cuts we have already made to the mpr have helped to smooth the business cycle, and, as we have mentioned before and now again in the report i am presenting, a still stronger monetary impulse will likely be necessary in order to ensure compliance with the inflation target. in particular, given the present conditions, and barring a big change in the economic scenario, we believe that the monetary policy adjustments the market expects, which are implicit in the various expectations indicators at the closing of this report – end of august –, will suffice to achieve the inflation target and help revive our economy. monetary policy is an important and significant tool to tone down the cyclical fluctuations of the economy. its countercyclical use is a privilege that we have earned after years of policy conduct that has strengthened the credibility of the central bank. but it is also important to note that powerful does not mean almighty. it allows to mitigate, but not fully offset, the natural fluctuations of a small, open economy like chile. more importantly, if we wish the chilean economy to attain higher growth rates in the medium term, it will be necessary to implement measures

consumer boom. note that during the 10 years after 1992, india's economy grew at an average rate of 6. 8 percent and continues to grow at the almost the same rate – not many countries in the world match this performance. second, changing consumer demographics indicate vast potential for growth in consumption both qualitatively and quantitatively. india is one of the countries having highest proportion ( 70 % ) of the population below 35 years of age ( young population ). the bric report of the goldman - sachs, which predicted a bright future for brazil, russia, india and china, mentioned indian demographic advantage as an important positive factor for india. third, technological factors played a major role. convenience banking in the form of debit cards, internet and phone - banking, anywhere and anytime banking has attracted many new customers into the banking field. technological innovations relating to increasing use of credit / debit cards, atms, direct debits and phone banking has contributed to the growth of retail banking in india. fourth, the treasury income of the banks, which had strengthened the bottom lines of banks for the past few years, has been on the decline during the last two years. in such a scenario, retail business provides a good vehicle of profit maximisation. considering the fact that retail ’ s share in impaired assets is far lower than the overall bank loans and advances, retail loans have put comparatively less provisioning burden on banks apart from diversifying their income streams. fifth, decline in interest rates have also contributed to the growth of retail credit by generating the demand for such credit. in this backdrop let me now come two specific domains of retail lending in india, viz., ( a ) credit cards and ( b ) housing. credit cards in india while usage of cards by customers of banks in india has been in vogue since the mid - 1980s, it is only since the early 1990s that the market had witnessed a quantum jump. the total number of cards issued by 42 banks and outstanding, increased from 2. 69 crore as on end december 2003 to 4. 33 crore as on end december 2004. the actual usage too has registered increases both in terms of volume and value. almost all the categories of banks issue credit cards. credit cards have found greater acceptance in terms of usage in the major cities of the country, with the four major metropolitan cities accounting for the bulk of the transactions. in view of this ever increasing role of credit cards a working group was set up for regulatory mechanism for cards.