Given that price adjustments in financial markets normally incorporate speculation about central bank decisions, with such a commitment by the Bank, a self-sustained improvement can be expected in financial and economic conditions. Public confidence in the price stability target could also improve if the Bank, by taking specific actions, were to make clear its opposition to any decline in prices.
In fact, the price stability target will likely be achieved earlier than would be the case if the Bank hesitated to conduct additional easing in response to a decline in prices, and the accumulative side effects of monetary easing may as a result be mitigated.