Fifth, monetary policy must maintain a medium-term orientation. The long and variable lags that characterise the monetary policy transmission process make it impossible for monetary policy to offset the inevitable unanticipated shocks that buffet the economy and the price level in the short-run.
Attempts to “fine tune” inflation developments on a month-to-month basis are doomed to fail and would only introduce additional unnecessary volatility into the economy. Sixth, monetary policy must be underpinned by a comprehensive analytical framework, which ensures that all information needed to take monetary policy decisions is available to policy makers in a form that supports efficient and timely decision-making.