Although it may be comfortable for markets to have certainty around the short-term repo rate path, the real priority for the larger economy is fostering confidence that inflation will be well behaved over the medium and long terms. To this end, we implement monetary policy through flexible inflation targeting.
This provides a framework both for interpreting economic news and for communicating our policy stance to our stakeholders so that it is more predictable over time. How, then, does the outlook appear through this lens? Page 6 of 9  As outlined earlier, the exchange rate and its long-term impact on price and wage determination remains the single biggest risk to inflation.