The BPLR system also fell short of its desired objective of enhancing transparency and serving as the reference rate for pricing of loan products, with a large part of the lending taking place at interest rates below the announced BPLRs.
At the time of our meeting, nominal ten-year overnight index swap (OIS) rates were up by about 30 basis points, entirely reflecting a rise in the inflation component (left chart, slide 9). These movements should not be seen as reflecting a genuine reappraisal of the expected future path of inflation.