, as part of malaysia's efforts to further spur the infrastructure development of the islamic financial system, it is my pleasure to announce that bank negara malaysia, the securities commission, bursa malaysia and industry players have worked collaboratively towards establishing a mechanism referred to as the commodity murabahah house. this mechanism which uses crude palm oil as the underlying commodity will facilitate islamic financing applying the concept of murabahah or tawarruq. bnm commodity murabahah acceptance as part of these efforts to promote development of products to meet the diversified requirements of investors, bank negara malaysia is pleased to announce the introduction of a new islamic monetary instrument, commodity murabahah programme ( cmp ) as part of its diverse range of policy instruments in managing the short - term liquidity in the malaysian islamic inter - bank money market. unique to malaysia is that the cmp is designed to be the first ever commodity - based transaction that utilises the crude palm oil based contracts as its underlying asset. the bank has executed cmp master agreements with the eight islamic banking institutions including the three foreign owned banking institutions to promote the use of the instrument for liquidity management. several cmp transactions have now been conducted between the central bank and the respective islamic banks. as commodity murabahah is widely used in other islamic centres, it is envisaged that this cmp will promote increased linkages between malaysia and these centres. bnm sukuk murabahah / tawaruq short - term securities the central bank also intends to diversify the issuance concept of the existing islamic monetary notes from being based on bai inah and ijarah into murabahah. currently, the outstanding amount of the respective notes is rm 8 billion. this initiative is the continuation from the commodity murabahah acceptance initiative as the issuance involves the securitisation of the acceptance facility. there are several key benefits of issuing the islamic monetary notes under this structure. it provides islamic financial institutions an additional instrument to manage liquidity risk on a short - term basis. it is also a financial instrument whose structure has been widely used for retail banking and syndication products in the middle east. finally, it provides an opportunity for new investors to invest in islamic financial papers in the malaysian market, thus diversifying the investor base. as part of the initiative to be linked to the global islamic financial markets, this instrument will be promoted to the international financial market. islamic derivative master agreement

mixed. however, external demand contributed, on average, much more to economic growth between 2001 and 2005 than domestic demand, which began setting the pace in the course of last year. evidently, with regard to major structural features as well as growth drivers, there are substantial differences between the uk and germany. however, the current economic performance of both countries clearly shows that enhancing growth and job creation is not necessarily the result of only one particular economic pattern. in fact, empirical evidence would seem to suggest that both the british and the german developments can yield favourable results. regardless of the differences just mentioned, one feature common to both economies has been that both have enjoyed a stability - oriented monetary policy over the past decade. the fact that the “ old lady of threadneedle street ” – the bank of england – was granted independence ten years ago is certainly among the prominent factors explaining the uk ’ s economic performance during the past decade. let me continue with a brief look at european monetary policy. european monetary policy last week, the ecb ’ s governing council decided to raise the key ecb interest rate by 25 basis points to 4 %. this decision was taken in view of the prevailing upside risks to price stability over the medium term. in brief, the underlying reasons for our decision were the following : incoming information has repeatedly indicated that the euro area is continuing to expand at a pace which is significantly faster than was generally expected one year ago. looking to the medium - term future, the economic outlook remains favourable, too. against the backdrop of supportive external and internal economic conditions, the most recent eurosystem staff macroeconomic projections foresee average annual real gdp growth in the euro area in a range of between 2. 3 % and 2. 9 % this year, and between 1. 8 % and 2. 8 % in 2008. the risks surrounding this favourable outlook for growth are broadly balanced over the short term. over the medium to long term, though, the balance of risks remains slightly tilted to the downside, owing mainly to external factors such as the possibility of further increases in oil prices, the fear of a rise in protectionist pressure, and concerns about possible disorderly developments in the wake of global imbalances. regarding price developments, inflation ( as measured by the hicp ) was 1. 9 % in may. according to eurosystem staff projections, average hicp inflation is expected to be around 2 %, or more precisely between 1. 8 % and 2. 2 %, this