You see, confidence is a central bank's most valuable asset when it comes to fulfilling its tasks to the best of its abilities. None more so than in times of turbulence, when trust and confidence provide an essential basis. And we are living through turbulent times, there is no doubt about that.
Even as real lending rate was significantly high, averaging around 7 per cent per annum, it did not deter private investment as stable inflation reduced inflation risk premia. In any case, the real lending rates were lower than the average real GDP growth of 8.7 per cent during 2003–08 and hence was sustainable.