and accelerated dramatically following the november decision of opec to maintain the volumes of oil production. then we decided to accelerate the transition to the floating exchange rate. looking behind, i would like to confirm once again that our country needed the transition to the floating exchange rate and it was a timely decision. it was the introduction of the floating exchange rate that quickly normalised the financial situation and saved us gold and foreign currency reserves. different solutions were unlikely to stabilise the financial system. the impact of external factors moved inflation up to 11. 4 % in 2014. unfortunately, it turned out to exceed the level we had expected. bis central bankers ’ speeches according to our estimates, sanctions and external trade restrictions account for one - third of the surfeit of inflation over the 5 % target level, and ruble depreciation accounts for two - thirds. these are one - off factors and now we can see the inflation going down. it responds to the set of measures taken by the bank of russia to stabilise the situation. let me remind you of these measures. these are both the transition to the floating exchange rate, and the unpopular but absolutely needed decision to raise the key rate. i would like to emphasise that as soon as the situation began to stabilise we started to gradually reduce the key rate. we have already cut it four times as we realise its importance for the economy and lending. the bank of russia introduced non - conventional refinancing instruments and started to lend foreign currency. this allowed us to pass the spikes in external debt repayments relatively easily this year amid restricted access to foreign markets. we worked with exporters to ensure that our major suppliers of foreign currency sell it evenly. meanwhile, the stabilisation of the financial system in january should not be tied to the oil price growth alone. certainly this process was supported by the oil price growth. against this backdrop the ruble started to appreciate and the situation even allowed us to start replenishing our gold and foreign currency reserves. now i will give you the details of our monetary policy in 2014. we have decided to grant the access to the main refinancing instruments to a wider range of banks ( the so - called 3rd tier banks ) and promptly extend the lombard list. in making the lombard list we abandoned the exclusive reliance on the international ratings agencies in order to reduce the dependence on them and make our own asset estimation. we are developing special purpose instruments to compensate for the so - called market failures

be in short supply. others might be in abundant supply, but less effective a priori and plagued by institutional complications. understanding the effectiveness – and hence the transmission – of purchases is therefore key to calibrating both the size and composition of our response in case we need to act further. purchases of different asset classes will affect private sector financing conditions to varying degrees as they will activate different transmission channels and affect different spread components. for example, purchases of bonds issued by euro area non - financial corporations ( nfcs ) would probably have some direct pass - through effect to the financing costs of those firms which have the standing and ability to tap credit markets directly. and they could indirectly – through a sort of “ trickling down ” effect – make credit more abundant and less expensive for smaller firms by increasing the scope for banks to redirect credit provision from larger to smaller enterprises. also, very low market - based funding costs might incentivise mediumsized firms to replace more expensive bank lending by issuing bonds. but compared to other asset classes, the market for nfc bonds is relatively thin and quite heterogeneous across the euro area. this could imply that potential portfolio rebalancing and signalling effects would be contained. furthermore, the large issuers which are active in this market are in all likelihood on average not financially constrained, which may limit the propagation of easier funding conditions to their decisions to expand capacity. the transmission would work differently if we were to decide to buy bonds issued by euro area sovereigns. this would be the only market where size would generally not be an issue. interventions in this market would therefore likely entail a stronger signal that the ecb – consistent with our forward guidance – is committed to maintain an accommodative stance for an extended period of time. this signal should not only compress the risk - free curve further, it should also spill - over to inflation expectations, thereby helping to lower the real expected rate of interest. we would also expect broad portfolio effects to materialise with sellers of government bonds willing to reduce their excess holdings of cash by bidding up the price – and hence lowering the yield – of alternative financial instruments other than those purchased by the central bank. for banks, broader portfolio effects might entail a shift out of government bonds – or other fixed - income instruments – and into loan creation. this essentially works through banks ’ opportunity cost of lending. our analysis shows that sovereign spreads in some member states are still preventing lending rates from falling further