The BOU intends to hold core inflation as close as possible to its policy target of 5 percent over the medium term, using the policy interest rate to counter any shocks which threaten to drive inflation above the target in a persistent manner.
Fiscal policy will become even more important as a tool for maintaining macroeconomic stability once production of oil and minerals begins on a commercial scale. A large part of the rents accruing from natural resources take the form of Government budget revenues and hence flow into the domestic economy through the Government budget.