Our considered view is that a policy target agreement should be drawn up that would be signed by the Minister of Finance and the Governor of the Reserve Bank to define precisely the coordinated effort needed to contain inflation in pursuit of the broader economic objectives of sustainable high economic growth and employment creation.
In this agreement the instrumental independence of the Reserve Bank must be guaranteed. This stipulation and the rest of the agreement will, of course, have to be ratified by Parliament. BIS Review 91/1999  8  Inflation targeting is a complicated monetary policy framework that requires careful preparations before an announcement is made to apply it in practice.