This was motivated by considerations related to the factors that I mentioned earlier. A more aggressive response to the incipient inflationary pressures may have been warranted under somewhat more predictable domestic growth and global scenarios, but in both these respects the situation in early 2010 was nowhere near stable or predictable.
A calibrated approach, which was essentially a relatively frequent series of small rate hikes, was seen as the best way to balance the potentially conflicting objectives. In the early phase of the cycle, surplus liquidity conditions persisted, which, clearly made transmission of policy rates through to transaction rates very sluggish.