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Governor of Eesti Pank approved the central bank's strategic development plan for 2009-2011 and the financial forecast and budget for 2009.

According to the strategic development plan, the primary monetary policy objective of Eesti Pank in 2009-2011 is to ensure the smooth functioning of the currency board and help Estonia move towards the adoption of the euro. In monitoring Estonia's economy, the main focus will be on the risks related to inflation inertia and external uncertainty. Meanwhile, economic policy cooperation with the government will be aimed at finding ways to avoid possible setbacks arising from these threats.

"In respect to ensuring financial stability, the central bank's most important goal is to further develop the safety net of the Estonian financial sector and pay special attention to the financial sector infrastructure. National crisis management capacity will be improved in cooperation with the Ministry of Finance and the Financial Supervision Authority and cross-border crisis management capacity in cooperation with Scandinavian central banks," said Governor of Eesti Pank Andres Lipstok.

As regards joining the euro area, Eesti Pank's main task is to reach the stage in preparation for the changeover to the euro where it can be completed within 12 months before the day the euro is launched. In addition, amendments to the management of foreign exchange reserves will be prepared in order to ensure optimum investment of assets once Estonia becomes full member of the Economic and Monetary Union. In addition, the strategy prescribes ensuring that cash management be ready for the changeover to euro cash.

"The adoption of the euro is the most important strategic objective of Eesti Pank, thus the central bank's 2009 budget has also been prepared following this principle. The bank aims at providing central bank services cost-effectively. Therefore, due to the deteriorating economic environment, we have thoroughly reviewed the entire cost budget and planned such expenditure and investment that are either impossible or inexpedient to postpone, for instance, rebuilding the cash centre of Eesti Pank to bring it into compliance with the requirements for handling euro cash," Lipstok said.

According to the next year's budget, Eesti Pank expects income on financial operations related to the foreign exchange reserve to be 912 million kroons and the central bank's 2009 profit to amount to 332 million kroons. The main operating expenses of Eesti Pank (production costs of banknotes and coins, personnel expenses, general administrative expenses, and depreciation of fixed assets) will be reduced by 12% on 2008, forming approximately 317 million kroons. The main operating expenses decrease mainly due to smaller costs of banknotes and coins production. In 2009, Eesti Pank plans to produce cash for 60 million kroons, which is 43% less than in 2008. The production cost of commemorative coins and banknotes will also drop by 4.3 million kroons in 2009. All the planned commemorative coin projects will be profitable for Eesti Pank.

Eesti Pank's expenditure on wages and salaries is expected to remain at previous year's level (124 million kroons in 2008) and the number of positions will not change, either.

General administrative costs will also remain at a level comparable to 2008, amounting to 95 million kroons. Such costs consist of expenditure on procurements necessary for Eesti Pank's principal activity - information technology, working environment administration, training and business travel of employees, international and domestic communication and publications.

As regards fixed assets acquisition, the largest projects are the renovation of the Sakala 4 building (Financial Supervision Authority) and the design and building works to bring the cash centre into compliance with the security requirements of the Eurosystem.

The 2008 net operating surplus of Eesti Pank will be published in the central bank's annual report in April 2009. Previous annual reports are available at: www.eestipank.info/pub/en/yldine/juhtimine/finantsaruanded/.

The strategic development plan of Eesti Pank for 2009-2011 will be published at: www.eestipank.info/pub/en/yldine/pank/arengukava/index.html.

Eesti Pank's financial forecast and budget for 2009	EEK
Net income on financial operations with the foreign exchange reserve	912,000,000
Net income on domestic financial operations	-288,000,000
Operating income	25,284,000
Operating expenses	-317,005,000
Personnel expenses	-124,742,000
Production of banknotes and coins	-60,415,000
General administrative expenses	-95,265,000
Depreciation of fixed assets	-36,583,000
Profit	332,279,000