On that note, a number of policy mix of monetary and macroprudential instruments have been implemented during 2010 to mitigate the global and domestic risks. In the midst of surging capital inflows and abundant excess liquidity, efforts to combat inflationary pressure cannot solely rely on conventional policy instruments such as the interest rate. Increasing interest rate may attract even more capital inflows.
It is for this reason, a mix of policy instruments is needed. 29. The policy mix implemented is intended to address the challenge of maintaining external and internal economic stability. Achieving external stability means, maintaining strong and sustainable balance of payment, meanwhile internal stability implies attaining low and stable inflation to support sustainable economic growth. 30.