to use different methods to allocate rrps to participating banks, including possibly an auction system. in turn, the option to auction rrps will give the bsp the means to implement a full interest rate corridor for omo in the future. presently, our omo is conducted with the rp as the ceiling and the sda as the floor. the electronic reporting of transactions will also expedite the calculations for another important initiative in progress – the ois, which is a determinative component in completing the benchmark yield curve. we can see, therefore, some interesting times ahead. we look forward to continue working closely with the leaders of our financial system in building financial market infrastructure and systems that are safe, secure and responsive to its stakeholders. thank you for your continuing support. finally, let us congratulate the bsp ’ s treasury department under the leadership of assistant governor winnie santiago who worked with the bsp ’ s payments system office, information technology sub - sector, and legal office in setting up this trading platform. bis central bankers ’ speeches we look forward to more joint undertakings that will continue to move us forward toward a better, bigger and stronger financial market that will keep our economy growing and increasingly inclusive. thank you all and mabuhay! bis central bankers ’ speeches

our challenge is to distinguish the trend from the temporary to avoid for a more detailed discussion of the use of monetary policy to counteract headwinds or tailwinds, see technical box 2, bank of canada monetary policy report ( july 2011 ) : 28. bis central bankers ’ speeches overreacting to the temporary – and give the public confidence that inflation will return to the right track. for this reason, the bank of canada, along with many other central banks, uses a number of measures to calculate core inflation, which are designed to minimize the influence of transitory price movements ( table 2 ). an effective core measure must have four key properties. it must be less volatile than total inflation ; closely track long - run movements in the total cpi ( in other words, be “ unbiased ” ) ; be related to the underlying drivers of inflation, notably the output gap, in order to reliably predict future trend movements in the total cpi ; and be easy to understand and explain to the public. since 2001, the bank of canada has featured one measure of core inflation as our operational guide for monetary policy : cpix, which excludes eight of the most volatile components of the cpi and adjusts the remaining components for the effects of indirect taxes ( chart 4 ). 4 included in those eight components are mortgage interest costs, which cpix strips out for a different reason : to avoid giving a perverse reading of the impact of monetary policy on core inflation. ( a measure of core inflation that includes mortgage interest costs increases when policy is tightened to bring down inflation. ) another exclusion - based core measure, cpixfet, takes out food, energy and indirect taxes. yet others calculate core inflation using a trimmed mean, which excludes different components each month based on whether or not they are exhibiting volatility at that specific point in time. more sophisticated methods track common price movements across categories in the cpi basket. such movements are more likely to reflect aggregate demand fluctuations than sector - specific developments. the advantage of these tools is that they take information on all the prices in the cpi and use objective methods to filter that information. the disadvantage is that in some cases they are constructed using techniques that, while firmly founded in logic and statistical theory, are very opaque. all the measures have followed similar tracks ( chart 5 ). each measure satisfies the key properties identified above to differing degrees. they all display less volatility than total inflation ( chart 6 ). and all but