When a policy fails to achieve the intended objectives, it creates credibility gap for the central bank and outright pessimism in the process. Our approach to dealing with this problem has been to enhance public understanding of what monetary policy can and cannot do, while collaborating with other organs of government to ensure the complementarity of the various economic policies.
Financial market infrastructure and institutions The absence of efficient and sound financial institutions and necessary market infrastructure, which are critical to effective conduct of monetary policy and its transmission mechanism, constitutes a major constraint to the achievement of policy goals in most developing countries.