This is the essence of flexible inflation targeting. At the same time it is stated that in taking monetary policy decisions, we should have due regard to the factors that might impact on the attainment of balanced and sustainable growth.
These factors include the output gap, credit extension and asset bubbles, employment and other labour market developments and the stability and competitiveness of the exchange rate. These factors are not only taken into account with respect to their impact on inflation, but our actions have also been affected by a concern for the impact of our actions on these variables.