But, at that point even the domestic recovery was at best in its early stages and its trajectory was quite uncertain. An anti-inflation stance in those conditions would have been rather risky. Finally, as I have already mentioned, an important lesson from the crisis was the critical role of liquidity in the financial system in maintaining economic stability.
The policy approach over the past few months has been very conscious of the need to balance the exit from an abnormally high liquidity situation, which the response to the crisis created with the current liquidity requirements of both the public and private sectors. Conclusion To conclude, the management of current inflation requires both supply-side and demand-side approaches.