In other words, when the Bank acts, it does so on the basis of assessing developments, gauging the impact on the economy and on inflation 1 to 2 years down the road, and taking action to achieve our inflation target over that horizon.
In the meantime, the equity markets in most economies are buoyant but are far more volatile over longer periods than in the recent past. There is a widespread concern among several central banks in emerging market economies about the added pressures on monetary management due to the prevailing extraordinarily strong and volatile cross-border capital flows.