on a nationwide basis ) had been slightly negative, but posted a slight increase for two consecutive months in november and december 2005. the year - on - year rate of change is likely to record a relatively clear increase in january 2006 and thereafter as the effects from the reduction in telephone charges dissipate. a positive trend is likely to be established thereafter, as the output gap continues improving gradually and downward pressures from unit labor costs decrease. on the financial front, the environment for corporate finance is becoming more accommodative on the whole. the issuing environment for cp and corporate bonds is favorable and the lending attitude of private banks is becoming more active. the decline in credit demand in the private sector is coming to a halt. under these circumstances, the amount outstanding of cp and corporate bonds issued has been above the previous year's level and the year - on - year rate of increase in the amount outstanding of lending by private banks, after adjusting for the liquidation of loans and loan write - offs, has been accelerating since august 2005 when the year - on - year rate of change turned positive. land prices remain generally on a downtrend, but the pace of decline has been slowing recently and in some areas such as central tokyo they have started to rise. ii. conduct of monetary policy the bank has been providing ample liquidity based on the quantitative easing policy. at the monetary policy meeting on february 8 and 9, 2006, the policy board decided to maintain the target range for the outstanding balance of current accounts held at the bank at " around 30 to 35 trillion yen. " the framework of the quantitative easing policy is based on two key elements. the first element is the bank's provision of ample liquidity to the money market so that the outstanding balance of current accounts at the bank substantially exceeds the amount of required reserves. the second is the bank's commitment to maintain this ample provision of liquidity until the year - on - year rate of change in the consumer price index ( cpi ) registers zero percent or higher on a sustainable basis. the effects of the quantitative easing policy have been changing with developments in economic activity and prices as well as the state of the financial system. when there were strong concerns over the stability of the financial system, the bank's ample provision of liquidity, which met financial institutions'liquidity demand, stabilized financial markets and maintained accommodative financial conditions, and thus contributed to averting a contraction in economic activity. in the current situation, the

expectations regarding the key rate, whereas growth in long - term yields is driven by the trends in global markets. deposit rates continued to go up in september — october, although more slowly than in the previous months. deposit terms are not yet sufficiently attractive to boost households ’ demand for this form of savings. as regards lending, the corporate segment continues to expand steadily. growth in consumer lending has slowed down somewhat. as regards the mortgage segment, after a slight deceleration in july — august due to the revision of the subsidised mortgage lending programmes, growth sped up again in autumn. in this context, we have revised our forecast range of retail lending growth for this year upwards by 3 percentage points to 21 – 25 %. the forecast for lending in the economy in general remained unchanged. currently, the actual changes in the credit market are obviously not sufficient to form such monetary conditions that would help bring inflation back to 4 % and stabilise it at this level. our today ’ s decision will accelerate the adjustment in the credit and deposit market. as regards risks to the forecast, proinflationary ones currently prevail. the main risk is that inflation expectations stay elevated for a long time. the longer the price growth rate remains high, even if fuelled by temporary factors, the more considerable this risk is. we could already observe this over the recent three months. as regards external conditions, proinflationary risks persist as well. in the first place, they are associated with prices for energy commodities and other commodities. the damper mechanisms protect the domestic market against fluctuations of global prices for commodities. however, an increase in foreign producers ’ costs might also affect inflation in russia. for instance, this happens when we import foreign equipment and vehicles made of more expensive metals. disinflationary risks are mostly associated with the fact that producer costs might decrease as fast as they have risen. we have recently observed a multifold increase in prices for container shipments. this has pushed up cargo delivery costs worldwide. however, this growth has stopped by the moment. possibly, even if prices do not decline to pre - pandemic levels, they might adjust downwards considerably closer to their initial level of this year, and later on this will translate into product prices. another important disinflationary factor is still recovery prospects in outbound tourism. i should focus on the anti - pandemic restrictions that are currently introduced. last spring, we believed that restrictions would cause a slump