do not foresee any significant effect to be brought about by the increases in indirect taxes or administered price adjustments, except those required by the automatic pricing mechanisms. in other words, should a requirement arises for a tightening in the public budget, we assume that this requirement will be met by measures for cutting down on expenditures rather than increasing the indirect taxes. any deviation from this framework may lead to a revision of the outlook for inflation and monetary policy. distinguished members of the press, a protracted period of rising food and energy prices has been hampering our disinflation efforts since the adoption of the inflation targeting regime. ongoing uncertainties resulting from global as well as domestic factors that led to a significant deterioration in inflation expectations necessitated a more cautious monetary policy stance. in this respect, in order to prevent the said uncertainties to be reflected on the general pricing behavior, we have conducted a monetary tightening over the past three months. monetary tightening was effective in containing inflation expectations, as the deterioration in inflation expectations came to a halt in july. current stance of the monetary policy supports disinflation. we expect inflation to remain at elevated levels in the short term before gradually moderating towards the targets. our revised inflation forecasts suggest that the inflation targets of 7. 5 percent, 6. 5 percent, and 5. 5 percent set for the next three years are attainable, even under quite conservative assumptions on food and energy prices. i would like to underline that adverse impacts of the supply side shocks on the economy will be more limited should all the economic agents take these targets as a benchmark in forming their expectations. prudent monetary policy is a necessary but not sufficient condition for attaining price stability. the support from fiscal policy and structural reforms are as critical as the monetary policy in this respect. sound fiscal policy has been one of the main factors in driving inflation down to single digits. the role of fiscal policy will continue to be critical on the road to price stability. preserving the resilience of the economy, especially under current conditions, requires the continuation of fiscal discipline and structural reforms. in this respect, the european union accession process and the implementation of structural reforms envisaged in the economic program remain to be of utmost importance. i would like to conclude my remarks by stating that advances in structural reforms, which would improve the quality of fiscal discipline and enhance productivity, are monitored closely by the cbt with regard to their implications on macroeconomic and price stability. thank you.

basis points above or below the repo rate. to summarise this relatively detailed outline, the riksbank ’ s monetary policy steering system means that the riksbank, by supplying a payment system and lending and deposit facilities, confines the market ’ s overnight rate within an interest rate corridor of 150 basis points. but it is through the weekly repo transaction and the daily fine - tuning operations that we ensure that the overnight rate is close to the repo rate. following the most recent monetary policy decision, we want the overnight rate to be close to the repo rate of 4. 25 per cent. in practice this means that this week ’ s monetary policy repo will be carried out at a repo rate of 4. 25 per cent. same objective but different systems many other countries also have the objective of steering the short market rate. however the systems used may differ. many central banks apply an interest rate corridor, like the riksbank, with the aim of keeping the short market rate in the centre of the corridor. this applies for instance to the bank of england and the ecb. like the riksbank they carry out weekly repos at a particular interest rate, with the objective that the short market rate should be close to this. in addition, there is the possibility to carry out fine - tuning operations. an important difference from the riksbank is the application of a minimum reserve requirement. like many other central banks, both the ecb and the bank of england require that the banks on average during a certain period have a particular, predetermined amount in their accounts with the central bank. the banks receive interest on these funds, at a rate close or equal to the policy rate. as long as the banks on average fulfil the minimum reserve requirement, they can to some extent decide themselves when the deposits and withdrawals from the account will be made during the period. this means that the minimum reserve requirement can be used to even out temporary imbalances in the payment flows between the banks, and between the banks and the central bank. as long as the average minimum reserve requirement is met, there is usually no cost if a bank wishes to deposit more in its account at the beginning of a period, for instance. the bank can count on being able to invest any surplus remaining at the end of the period in the market at a rate close to the policy rate. it is possible that the formulation of minimum reserve requirements can affect the need to