##b programme of the central government, big corporate issuers such as kengen, safaricom, some commercial banks and mortgage firms have taken advantage of the growing bond market to raise longterm resources to finance their capital projects. in fy 2011 / 12, the infrastructure bonds programme constituted 30 % of total annual funding from domestic borrowing. e. horizontal repurchase transactions ( horizontal repos ) – in september 2008, the interbank repo backed by government securities as collateral was rolled out to facilitate liquidity re - distribution among commercial banks. however, uptake has not been vibrant, but the cbk is working on modalities that will resolve market constraints so far raised by participants. f. revamping of bonds trading in the secondary market : secondary trading is a key channel for re - pricing of securities to provide updated or current benchmarking prices for use in valuation of other securities. this is where the market yield curve is refined. it also provides securities access to many investors who do not make purchases at the primary market. g. lengthening the yield curve : to minimize rollover risks and at the same time provide a benchmark for pricing long term capital, the cbk issued a 30 - year bond, the longest security tenor in the region. the bond issued in february 2011 has actively been at the nairobi securities exchange. we called it “ savings and development bond ” to encourage small savers to invest in it and use it as collateral. the bond was re - opened in august to boost its size, encourage secondary trading and refine the yield curve. bis central bankers ’ speeches with the adoption of the automated trading system ( ats ) in november 2009 and increased liquidity of benchmark bonds, turnover at the nse improved from ksh. 108bn in 2009 to ksh. 401bn for the period july 2013 to june 2014. in addition, reduced settlement time using the kenya payments and settlement system ( kepss ) infrastructure delivery versus payment transaction mode ( dvp ), has ensured efficiency of trading transactions, price discovery and security. this has resulted in improved market confidence in securities trading and increased demand for securities in primary auctions. those are some of the milestones we have realized through the market leaders forum and in partnership with other players. but this is not to say there are no challenges as i mentioned during the mlf annual dinner in july this year, the mlf has midwifed the emergence of the kenya government securities market as the

##erts pressure, in particular, at the slightest rise in the cost of labour, especially unskilled labour. in a more general manner, it tends to modify significantly the previous balance between capital and labour at the global level. globalisation also exerts pressure conducive to price stability by strengthening global competition, by reducing the ability of firms to fix prices and by exerting pressure on unit production costs in the industrialised countries. a third influence, which is in keeping with my previous two points, is that globalisation has also exerted a positive effect on the productivity of the global productive sector by facilitating, and accelerating, the phenomenon of restructuring and optimisation of the division of labour in a wider cross - border context. but it would be naive to think that the effects of globalisation on inflation go in one direction only. indeed, the sudden emergence of fast - growing economies in the global economy is exerting upward pressure on prices for mining products and fossil fuels. this phenomenon has been particularly visible since 2003. the same phenomenon of rising prices is observable in certain areas of agricultural production. the attainment of considerably higher living standards by a new and numerous middle class translates into major changes in eating habits and, as a result, in the meat, cereal and fresh produce sectors of the world economy. since the theoretical influences that globalisation can be said to have on prices are numerous and work in different directions, it might perhaps be natural to suppose that globalisation, as a continuous phenomenon with medium - term effects, will translate into substantial changes in relative prices – the prices of manufactures falling and those of oil, gas and certain commodities rising – without the general level of prices being significantly affected. empirical research does not allow this conjecture to be either irrefutably confirmed or disproved in the recent period. all in all, the available data indeed confirm that the prices of manufacturing imports in the euro area were at end - 2006 still below their 2001 level. although import prices for raw materials have risen strongly since 2003, it can be said that, over the same period, the acceleration in import prices overall, all products taken together, has been moderated by the growing proportion of euro area imports coming from countries with low production costs ( countries in eastern europe and asia, particularly china ). it remains that the phenomenon of globalisation and of its acceleration since the mid - 1990s has coincided with a decline in global inflation and in its volatility. con