We hold the policy rate since then and maintain our tight monetary policy stance. The primary objective of this aggressive interest rate policy is to preemptively anchor inflation expectation that initially arose from food price shocks.
Subsequently, the increase in policy rate is to contain the second round impact of fuel price hike that caused CPI inflation to reach its peak at 9.0% in July 2013. The large increase in policy rate is also to help in slowing down the domestic demand to dampen the current account deficit that rose to a peak of 4.4% of GDP in Q2-2013.