therefore invest appropriately in developing effective corporate communication strategies as a new liquidity management tool. last but not least, i would like to congratulate mr. matthias katamba on his appointment as the new managing director of dfcu bank. but also thank mr. juma kisaame for serving dfcu bank diligently. mr. michael mugabi, allow me to congratulate you in your new assignment as acting managing director of housing finance bank. and i hope that the board of directors shall find it fitting to confirm you in that position. once again, i thank you for the continued support to the economic development of uganda through your financial intermediation role. thank you for listening. professor emmanuel tumusiime - mutebile governor, bank of uganda

to undermine the economic progress achieved over many decades of efforts. at the same time, the crisis has given rise to deep question marks about our understanding of economics, in general, and of monetary policy in particular. for instance, it has become increasingly evident that while the possibility of implementing an independent monetary policy is greater under exchange rate flexibility, floating implies costs that set limits on the degree of independence a central bank can enjoy. furthermore, doubts have emerged regarding the adequate monetary policy framework under current circumstances, the merits of intervention in the foreign exchange market, the role to be played by monetary policy in the preservation of financial stability, and the use of capital controls as a means to counter the adverse effects of volatile capital flows, among others. how has monetary policy in mexico responded to these challenges? at present, the implementation of monetary policy in mexico rests on four pillars. first, an independent central bank with the mandate to focus on achieving a low and stable rate of inflation. both features, as well as the key provision that no authority will be able to order the banco de mexico to provide financing, are stipulated at the constitutional level. second, an inflation targeting regime, with a specific target for headline cpi annual inflation of 3 percent within a variability interval of + / - 1 percent, and where convergence to the target is sought at the lowest possible cost in terms of economic activity. third, a commitment with transparency and clear communication of actions and goals of the central bank. fourth, awareness that under a situation of high uncertainty, there are clear merits of an approach emphasizing prudence and readiness to act on a preventive basis whenever this is considered convenient. naturally, an efficient achievement of the macroeconomic objectives requires a balanced policy approach. it may be useful to note, for instance, that the global financial crisis has evidenced the costs derived from a policy response that relies excessively on monetary policy. in the case of mexico, two elements are central in this regard : the implementation of measures aimed at fostering an orderly functioning of the foreign exchange market in a context of sharp depreciation and high volatility of the peso - dollar rate. with the support of a comfortable level of international reserves and a flexible credit line with the imf, actions taken by the foreign exchange commission2 have varied according to circumstances, and have included pre - announced or sporadic discretionary interventions in the foreign exchange market and, more recently, the introduction of a new mechanism for the hedging of foreign exchange risk for an amount