together with the elevated degree of uncertainty at the time, led to a considerable slowing in wage growth in the private sector. weak demand growth also put downward pressure on firms ’ margins, and the appreciation of the exchange rate has recently led to price reductions for many imported goods. given the inevitable lags, these factors are likely to see underlying inflation in year - ended terms come down a bit more in the near term. notwithstanding this, the outcome for the march quarter was slightly higher than we, and most market observers, had been expecting. one clearly needs to be cautious in interpreting a single figure. however, this outcome is consistent with the idea that the disinflationary forces in the economy are not quite as strong as previously expected, largely because the economy has performed better than previously expected. one other aspect of the recent data on inflation worth noting is the divergent trends in the prices of tradable and non - tradable items. over long periods of time, the prices of nontradables – which are mostly services – have tended to rise more quickly than the prices of tradables – which are mostly goods. for example, over the past decade the average annual increase in the prices of non - tradables was 3¾ per cent, while the average increase in the prices of tradables ( excluding food and fuel ) was much lower, at just ¾ per cent. the primary reason for this difference is the faster rate of productivity growth in the production of goods than in services. looking at the recent inflation data, we can see that this difference is currently quite large ( graph 10 ). one very concrete example of this can be seen in divergent movement in the price of health services – a non - tradable – which has increased by 6 per cent over the past year, and the price of clothing – a tradable – which has fallen by 3 per cent over the same period. graph 10 the recent decline in the prices of tradables reflects the appreciation of the exchange rate that i noted earlier, as well as tariff cuts at the beginning of 2010, and discounting by retailers in the face of subdued growth in retail sales over the past year. looking ahead, these factors are likely to continue to contribute to low rates of tradables inflation for some time yet. for non - tradables, the picture is somewhat different, with year - ended rates of inflation picking up recently. this is partly explained by a number of specific factors that

security, the bank decided to have the optiks security feature on the new $ 100 banknote. this feature, which is a super wide security thread with a transparent “ window ” that is highly secure and extremely difficult to replicate successfully, is the most visible security feature on the $ 100 note. with regards to the design, the note designers have added some attractive motifs to the designs on the existing $ 100 banknote to gives us yet another beautiful banknote that portrays the unique and diverse cultural heritage of our happy isles. in that connection, i would like to acknowledge professor les tickle, dr adrian allen, ms. barbara house and late sister claire o ’ brian for their contributions in terms of the motifs from the book ‘ images and islands ’ that they co - authored which some of the designs now feature on our notes. you will find some of these designs on both the top and bottom pattern bars on the new $ 100 note. today, looking at the beautiful note in front of me, i can confidently say that all the work that went into this project has been worth the time and effort spent. on behalf of the board of directors, management and staff of the cbsi, i would like to thank all those who have helped us to make this project successful. in particular, i would like to thank the government for supporting our recommendation. i would like to thank the board of cbsi for having faith in the bank ’ s ability to deliver this reform. i would like to thank members of the currency committee, chaired by deputy governor, mr gane simbe, who have worked tirelessly to meet the project milestones. i would also like to register my thanks to mr. daniel haridi, chief manager currency & banking operations department, who provided the link between the bank and de la rue in matters relating to this project. on the same tone, i would like to thank our note supplier, de la rue currency, who is represented here today by its regional manager responsible for the oceania region, ms brooke banks and also sincere thanks to ms. gill sugg – the manager responsible for this project in the united kingdom. bis central bankers ’ speeches thank you so much for your professional assistance that has helped the bank to meet its deliverables since the concept stage of the project about two years ago. conclusion in closing, i would like to remind the good people of solomon islands that the government spends a lot of money each time it replenishes its stock of currency notes and