For each renewal, the Bank conducts a deliberate, rigorous and transparent research program to critically examine important issues related to the policy framework. Based on this analysis, we adjust and improve the framework. We examine two types of issues in the renewal process: fundamental and operational.
Fundamental issues include whether the target for monetary policy should be changed, and to what extent monetary policy should consider financial stability concerns. 12 Operational issues include how to measure underlying or core inflation. Given the policy’s effectiveness, the renewals have gone smoothly. But, I can assure you, they are not automatic.