6  BIS Review 141/2009  The lowering of inflation, to a more sustainable level, is a major policy goal for the Central Bank, as set out in its 2009 monetary policy stance. Whilst international price falls have been one major contributor to this reduction in inflation, Central Bank intervention has also been important in increasing price stability.
The CBSI intervened to reduce the level of excess liquidity in the financial system and so slow down lending, which was fueling inflation. In order to do this the Bank redefined the liquid asset ratio, which acted as a de facto raise in the required level of reserve holdings by the commercial banks.