The latest baseline forecasts indicate a broadly steady path of inflation for 2020 and 2021, with average inflation remaining within the target range of 3.0 percent ± 1 percentage point. Inflation expectations also continue to be firmly anchored within the target over the policy horizon. Thus, a few weeks ago, the Monetary Board decided to cut the policy rate by another 25 basis points.
This is a preemptive reduction in the policy rate to support market confidence and to defend against the potential spillovers associated with the mentioned external factors. 1/6  BIS central bankers' speeches  Strong external position We have hefty Gross international Reserves (GIR), $ billion as of end-January 2020.