important role. milton friedman ( friedman and schwartz, 1963 ) stated that a restrictive monetary policy does not depend on the support of fiscal policy. but this claim was formulated for a situation with limited bank liquidity. we are in a different situation. we are living in excess liquidity. it is easy for banks to finance government debt. it is easy for governments to issue new bonds. this can easily lead to further inflation. that is why i have said at the press conferences after all our monetary policy meetings that reducing government deficits is another important precondition for reducing inflation in the long term ( see also cochrane, 2023, for example ). as a board, we also discussed that if budget deficits remain high, we will need to maintain higher interest rates to keep inflation at 2 %. essentially, this means that our hypothetical / modelbased neutral rate r * would be increased due to continued fiscal deficits. this is a similar reasoning to schnabel ( 2024 ). lessons and current strategy overall, we have learned our lessons. we have decided to ask for the first external assessment of monetary policy in the history of the cnb. the review will consist of three independent parts : » a team led by two professors from the university of economics in prague ( martin mandel and karel bruna ) will focus on our core model as well as on the interaction between the central bank ’ s monetary policy and government fiscal policy. » john muellbauer from the university of oxford will review the model and subsequent monetary policy recommendations. » finally, roman sustek from queen mary university of london will focus on the individual parts of the model and discuss whether it is appropriate to have only one core model. the bank board will discuss the results of these assessments and we expect to publish the conclusions early next year. that was the story and development of the second assumption we made at the beginning about the causes of inflation. this demand - or money - induced inflation can be more persistent. now for the current situation. our key interest rate is now 5. 25 %. we have cautiously lowered interest rates since december 2023. in december, we lowered the interest rate from 7 % by 25 basis points. then by 50 basis points to 6. 25 % in february. then by 50 to 5. 75 % in march. then by 50 to 5. 25 % in may. the debate at the next meeting at the end of june will probably be about whether to cut by

set the minimum requirements on the pathway of becoming chartered professionals and for financial institutions to become accredited institutions that would enable the training of staff as islamic finance professionals. more is in the pipeline and i am confident that ciif is committed towards developing the highest quality of guiding principles and guidelines that are in line with the current and future developments. another bold action that we shall embark on is the transformation of the association of shariah advisors in islamic finance ( asas ) to become the leading professional body for shariah advisors. this transformation would further complete the islamic finance service providers ecosystem. this is envisioned in the financial sector blueprint, with standards to be set for professional programmes, qualifications and continuous professional education on shariah. i would like to congratulate the board and management of ciif on its official launch. i am confident that ciif can contribute towards higher professionalism for the islamic financial services industry. i am confident ciff would embed a culture that places unequivocal commitment to professionalism and ethics that would raise the prestige of the islamic finance industry and its practitioners. bis central bankers ’ speeches