Also here, the “first line of defence” lies in the broader institutional and legal framework. In fact, the ease with which a central bank can operationalise a leaning-against-the-wind strategy is inevitably affected by the broader policy framework.
In a weak macroeconomic framework, the central bank will not just have to “lean against the wind” – it will be forced to “lean against a storm” that will inevitably put strains on – and ultimately overburden – any type of monetary policy strategy.