First, with a view to pursuing quantitative monetary easing, the Bank changed the main operating target for money market operations from the uncollateralized overnight call rate to the monetary base, which is the total amount of money the Bank directly supplies to the economy.
The elevated level of economic slack, weak energy inflation and the recent appreciation of the euro are expected to continue to act as headwinds, such that our baseline projections expect average headline inflation only to gradually rise towards 1.0 percent in 2021 and 1.3 percent in 2022 (Chart 3).