centre around quality, elements of noise, formation of expectations, and implementation lags. the time - consistency issues relate to the conditions for substitutability between communications and policy actions, and choices between effectiveness of unanticipated policies relative to elimination of uncertainty in private decision making. the optimality issues address the aspects of dangers of disseminating information which could result in crowding out of the formulation of independent beliefs by the private sector – which is critical to well - functioning markets. the institutional and decision - making processes of monetary policy refer to the recent trends towards autonomous group - decision making, like the monetary policy committee of the uk ; the composition of the groups, the periodicity of their meetings, the attributability of opinions, the transparency, etc. it should, therefore, be clear that even on the limited issue of communication policy in regard to monetary policy, the literature provides a framework but the practices tend to be diverse amongst countries. there is no universally valid international benchmark on the subject but the framework, which is still evolving, is useful as a reference point for exchange of information amongst different countries that this regional seminar seeks to promote. while the framework for a country is useful, it is the judgment within the framework that really matters. in india, we are proceeding gradually to a more open and participative process monetary policy formulation, which will be covered by my colleagues later in the seminar. the growing importance of communications by central banks is on account of their responsibility for maintaining financial stability – which includes but goes beyond the conduct of monetary policy. there is an assumption that well - informed market participants would enable, if not assure, an improved functioning of the markets, and a central bank is in the best position to provide such useful information. however, whether providing information would result in shaping and managing expectations, and if so, whether it is desirable, are difficult issues. for example, the us federal reserve, since 1994, appears to have been providing forward guidance, while the european central bank appears to be in the mould of keeping the markets informed rather than guiding it. we, in india, have taken a middle path of sharing our analysis in addition to information, but in no way guiding the market participants. however, in doing so, we have the benefit of the process of two - way communication, of information as well as perceptions, between the market participants and the rbi. the two - way process is enabled by formal structured meetings with industry

annual terms, due to some balance sheet adjustments in individual banks, poor performance of lending to households and contraction in corporate lending. new available information keeps our baseline projections for the economic outlook unchanged. the albanian economy is expected to record low and positive growth rates, albeit substantially below potential. in the absence of room for stable fiscal stimulus, the growth of aggregate demand in the short - term period is expected to be driven by the external demand. in the long run, the magnitude of economic growth will be determined by the performance of consumption and private investments. below - potential growth will give rise to weak demand - side inflationary pressures. supply - side pressures will also be subdued in the period ahead. in the absence of unexpected supply - side shocks, annual inflation is expected to be low in the quarters ahead. at the end of discussions, the supervisory council decided to keep the key interest rate unchanged, at 3. 5 %. the council notes that the current monetary conditions are appropriate to ensure our inflation target is met in the medium - term period, providing at the same time proper monetary stimulus to recover private demand. in particular, the rapid drop in the yields over the past month reflects the low key interest rate, low inflation expectations and the reduced government borrowing from the domestic markets. the drop in the yields, in turn, provides room for lower rates on private sector credit. the projection of a similar setting for the future would allow better monetary policy transmission to the economy. bis central bankers ’ speeches