Keeping interest rates artificially low may have short-term benefits, but it will result in higher inflation in the long run. We cannot ‘buy’ higher growth and employment through high inflation. In fact, high inflation inhibits growth. Low inflation, by contrast, allows for lower interest rates and higher growth.
Whether we operate in an inflation-targeting framework or not, our objective will still be the protection of the value of the currency. Inflation targeting is a framework within which to achieve this target. It makes our objective transparent and helps to anchor inflation expectations. We would not behave differently in the absence of an explicit target.