Countries with a domestic nominal anchor made use of the flexibility with regard to interest and exchange rates to reduce inflation and achieve price stability.
However, the Committee is certainly aware that very low inflation poses risks to economic performance – for example, by raising the real cost of capital investment – and increases the risk of outright deflation. Consequently, we will monitor this situation closely as well, and we will act as needed to ensure that inflation moves back toward our 2 percent objective over time.