In January, after eight consecutive interest rate increases, we said that we expect to hold the policy rate at its current level, conditional on the outlook for inflation. We are pausing to assess how well our interest rate increases are working to bring inflation down. With inflation above 6%, we are still a long way from the 2% target.
But inflation is turning the corner. Monetary policy is working. That’s what I’d like to talk about today—how, exactly, monetary policy works to control inflation. I’ll outline what we’ve done so far, what the impact has been and what we expect going forward.