simple interest rate rule based on the bank ’ s previous interest rate setting. 5 the rule includes developments in inflation, wage growth, mainland gdp and central bank key rates abroad. the interest rate in the previous period is also important. the key rate is now below the lower end of the interval projected. norges bank has given weight to staving off particularly adverse outcomes and therefore brought forward the decrease in the key policy rate last autumn. the projections for the key rate, inflation, output and other variables are based on our assessment of the economic situation and our perception of the functioning of the economy and monetary policy. if economic developments are broadly in line with our projections, see staff memo 2008 / 3 from norges bank. economic agents can expect that the interest rate path will also be approximately in line with that projected. on the other hand, the interest rate path may shift if the economic prospects change, or if the effect of interest rate changes on inflation, output and employment differs from that assumed. in the monetary policy report, we present two alternative scenarios where demand is higher or lower than presented in the baseline scenario. the yellow lines in the chart illustrate a scenario where growth in private consumption is stronger than expected and the turnaround occurs more rapidly. in this scenario, interest rates may decrease to a lesser extent and move up more quickly. the red lines in the chart illustrate a scenario where the global downturn is deeper and more prolonged, with more pronounced effects than assumed. it will then be appropriate to set a lower interest rate in order to stimulate the economy and thereby prevent inflation from becoming too low. the primary effect of a key rate close to zero will probably come via a weaker krone. it will then be appropriate to consider instruments other than the interest rate. monetary policy normally operates by lowering key rates to reduce the real interest rate when expected inflation and market risk premiums are stable in the short term. when the key rate moves close to its lower bound, the real interest rate can still be influenced through key rate expectations, influencing risk premiums and anchoring inflation expectations. the expectations channel will be particularly important if the current key rate cannot be further reduced. for norges bank, the expectations channel is an established part of monetary policy in that we provide forecasts for the key policy rate. to sum up, it is useful to decompose the factors behind the change in the interest rate path since 17 december 2008. the interest rate forecast in the monetary policy report is lower than the

this regard, the demands by customers and innovations by financial sector players as a result of being empowered through financial education drive financial sector development. this scenario clearly confirms that each one of us requires financial education. all aspects of our lives entail financial decisions and limited financial knowledge is a precursor to poor savings and investment decisions. ladies and gentlemen : fsd kenya and the central bank of kenya in conjunction with several other financial sector players have undertaken two financial access surveys ( finaccess ) in 2006 and 2009. the surveys were aimed at establishing the level of kenya ’ s population that utilises formal financial services. the two surveys established the banked population as 19 percent in 2006, it has increased to 23 percent in 2009. i am sure with financial education and more products in the market this proportion will increase. the finaccess surveys have also included questions on financial literacy and use of technology in financial transactions. following the release of the 2006 finaccess survey results, fsd kenya brought together several financial and education sector players to form the financial education partnership ( fep ) to spearhead the development of a national strategy on financial education. the efforts of the partnership are progressing well. in addition, i have been appointed as the national champion of financial education in kenya and the launch of four pilot projects to inform what modes of financial education work in kenya are important dimensions. ladies and gentlemen : the partnership ’ s quest to develop a national strategy for financial education in kenya is mainly informed by the need to protect the consumers of financial services. the best way to protect consumers is to empower them with financial knowledge which they can use to demand quality services at fair prices. as the financial education strategy is being developed, the government through the ministries of finance and trade are spearheading efforts towards coming up with a comprehensive financial services consumer protection law. however, the law alone will not be enough, since for consumers to take advantage of it they must be enlightened on their rights and obligations regarding financial transactions. ladies and gentlemen : let me now share with you the aspirations of the central bank of kenya ( cbk ) as regards financial education. other than its participation in the partnership, the core mandates of the bank, which are price and financial stability, demand that we explain to the public all that we do to achieve these mandates. in this regard, cbk takes up available opportunities to disseminate financial knowledge to the public. in particular, the success of the new developments in our banking