STATEMENT ON MONETARY POLICY – MAY 2006

Contents

Introduction

International Economic Developments

Box A: Recovery in Japan

International and Foreign Exchange Markets

Domestic Economic Conditions

Box B: Regional Economic Performance

Foreign Trade and Capital Flows

Box C: Commodity Contract Prices and Trade

Domestic Financial Markets and Conditions

Box D: Capital Gains and Measures of Household Saving

Inflation Trends and Prospects

List of graphs

List of tables

The material in this Statement on Monetary Policy was finalised on 3 May 2006. The next Statement is due for release on 4 August 2006.

The Statement on Monetary Policy is published quarterly in February, May, August and November each year. All the Statements are available on the website when released and are reproduced in the following issue of the Bulletin. Expected release dates are advised ahead of time on the Bank's website. For copyright and disclaimer notices relating to data in the Statement see the Bank's website.

ISSN 1448–5133 (Print)

ISSN 1448–5141 (Online)