Let me end with a few words on how the Reserve Bank has been seeing monetary policy. The context for monetary policy over the past year or so has been that the overall economy is operating with relatively little spare capacity, and is facing a very large boom in investment and a large rise in national income.
The Bank’s view has been that, if this is to be accommodated without generating undue inflationary pressures, other components of spending would need to grow less than might otherwise be the case. The implication of this is that monetary policy would need to provide an element of restraint.