rate for the first time in the current cycle. 1 / 3 bis - central bankers'speeches in the euro area, the ecb's governing council lowered the deposit facility rate twice already, in june and september, bringing it to 3. 5 percent. the eurosystem also narrowed the spread between the main refinancing rate and the deposit rate from 50 to 15 basis points. the latter step was no surprise. it had already been announced in the context of our operational framework review in march. while excess liquidity will remain high over the coming years, it will gradually decline as part of our monetary policy normalisation. by reducing the spread between the main financing rate and the deposit facility rate, the eurosystem aims to limit future swings in money market rates, while maintaining incentives for more market activity. we will continue to closely monitor developments in the money markets and other refinancing markets. 3 what else have we achieved? the eurosystem – and the fed – are continuing to shrink their balance sheets. in the euro area, we stopped reinvesting bond redemptions from the asset purchase programme app [ from july 2023 on ]. and the eurosystem is phasing out the remaining reinvestments of redemptions from the pandemic emergency purchase programme [ pepp ] by the end of this year. furthermore, euro - area banks have repaid the overwhelming share of their long - term crisis loans, the tltros. in the us, you are well aware that the fed had started to reduce its securities holdings approximately a year earlier. from a central bank perspective, there are good reasons for this withdrawal of liquidity. with the end of negative [ and zero ] interest rates, an important reason for large - scale bond purchases has vanished. furthermore, large balance sheets of central banks can lead to market distortions. they may lead to collateral scarcity or a deterioration of market liquidity. finally, yet importantly, central banks should only intervene in financial markets to the degree necessary for monetary policy purposes. it is encouraging that, so far, the balance sheet reduction has been well received by financial markets. investors have adapted to a market with fewer central bank purchases and hence less ample liquidity provision. market functioning remains largely robust. 4 what challenges lie ahead? ladies and gentlemen : while central banks have made good progress in normalising their monetary policy stance, challenges remain. let me briefly address three of them. first, despite the wave of

there can be two main explanations for this development : a surge on speculative trading or a surge in physical trade. in the former case, although there have been some improvements in financial markets, activity on non - commercial commodity trade is still bellow last year levels, and the causal relationship between speculative trading and prices is under hard scrutiny. in this regard, there is a clear concern of us authorities that are set to strengthen the regulation on commodities markets, and at the same time are going to disclose more detailed information on non commercial operations. on the fundamentals of these markets, there is much more information to justify an upswing on prices : on the supply side there is a lower harvest of some grains and oilseeds. the stagnation of productive investment ( because of reduced spending in fertilizers, seeds and equipment ) due to the crisis, in a context of low grain stocks, makes the markets vulnerable to any weather shocks in the 2009 / 10 season, something that starts to be reflected in prices. for example, my country consumed 30 % less fertilizer during 2008, while in the first quarter of 2009 imports showed a decline of 90 % annually. this lower investment is particularly relevant for countries in the southern cone because it would affect the productivity of the soils, which were damaged by the drought of the last season ( even with favorable weather, it is likely that productivity will be lower than that of recent years ). on the demand side, there were new increases on biofuels targets and a broad re - stocking process, taking advantage of lower prices. much of this is reflected on a surge on vessels use with a clear impact on freight rates, which jumped nearly 50 % last june. in addition, with a focus on ensuring the future supply of food and commodities and on investment, countries like china and saudi arabia, among others are making progress in the purchase of arable land in developing regions like africa and in our region. this factor shows a renewed investor ’ s interest in the development of agriculture. the first reason that explains the proliferating acquisition of land is linked to food security concerns. several countries invest in the long run to feed their people at affordable prices. the second reason is more related to financial gains. faced with the collapse and prospects for future increases in prices of food and land, institutional investors are returning to invest in the agricultural sector. it is crystal clear right now that the way out of this crisis for emerging markets will be critical for the future growth