Generally speaking, prompt adjustment in the prices of assets to new information is to be expected. Most of the time, these changes reflect the appropriate pricing and transferring of risk as circumstances change. When prices do not accurately reflect changing circumstances, however, resources are likely to be misallocated and efficiency suffers.
Conduct of Monetary Policy 2017 has been a challenging year for the conduct of monetary policy given the government’s cashflow constraints and the 2017 National Election. The Bank however managed its price stability objectives by keeping inflation at 6.0 percent in the first quarter and 5.8 percent in the second quarter of 2017.