The Policy Targets Agreement makes it clear that external shocks, changes in indirect tax rates, and similar factors constitute valid reasons for the inflation rate to diverge from the target for a time. (The latest PTA, signed on 16 December 1999, is attached.) We characterise ourselves as "flexible inflation targeters" rather than "strict inflation targeters", in Lars Svensson's terminology.
But there is debate even within the Reserve Bank itself whether we have always been flexible inflation targeters or whether perhaps we have evolved to greater flexibility than we had earlier in our inflation targeting history. BIS Review 5/2002  7  There is little doubt that in the early years our rhetoric was rather "strict".