longer than paper – and will therefore be more economical. these bank notes are also green. their environmental footprint is smaller than that of the old currency made from cotton - based bank note paper. once these new notes are removed from circulation, they will be recycled into other products right here in canada. since the new notes were unveiled last june, bank of canada staff across the country have been training the millions of cash handlers and tens of thousands of police officers about how to check the security features of the notes. this training, of course, is ongoing. the rcmp continues to be a strong and committed partner in the fight against counterfeiting. reports of the death of cash are greatly exaggerated : our research shows that cash is used for more than half of all shopping transactions. canadians need a currency they can trust. bis central bankers ’ speeches that is why we are launching today the most secure and advanced note series in the bank ’ s history. in short, these new bank notes are a 21st century innovation in which all canadians can take pride. we are honoured to launch them here at mars, with its links to past glories, current successes, and the promise of future canadian medical innovation. bis central bankers ’ speeches

– the monetary policy report and monetary policy report update – if inflation persistently misses the target. this increases our accountability to canadians. finally, we refined the way we measure core inflation. refinements to core inflation i want to take a minute to explain what core inflation is, and why it is important. the bank's inflation - control target applies to the annual increase in the total consumer price index. but we use core inflation as a guide to help us predict where overall inflation is likely to be in the future. in calculating core inflation, we exclude the prices of those goods and services that tend to be the most volatile ; that is, subject to temporarily wide movements both up and down. previously, we would strip out all food and energy items from the cpi basket of goods and services when we calculated core inflation. but not all components of food and energy are volatile. similarly, there are other prices in the economy that are highly volatile. so we found it helpful to focus just on the volatile components in order to do a better job in predicting the future path of inflation. let me give you an example that explains why core inflation is important. in late 2000 and early 2001, energy prices were shooting higher. anybody who drives can remember paying a lot more at the gasoline pumps a year ago than now. natural gas and heating oil prices were also rising sharply. these prices were being reflected in the overall inflation rate, which moved above 3 per cent for the first time in almost 10 years. this prompted some commentators to call on the bank to raise interest rates. but the core rate of inflation was telling us that these higher energy prices were not significantly feeding into other prices. the core rate suggested that inflation would fall back around the midpoint of the target range, once the surge in energy prices either levelled off or reversed itself. in fact, this is exactly what happened. it would not have made sense for us to raise interest rates in the face of these temporarily very high prices for oil and gas. so even though total cpi inflation was high in the first half of 2001, the weakening economy indicated that downward pressure on inflation was coming. we expected core inflation to fall by the end of the year, as indeed it did, and to fall further in 2002. that led to our decision to lower, not raise, interest rates. in the last few months, we've seen rapid declines in volatile components, such as gasoline, fuel oil, and air fares. this means total consumer