In offering a response to the criticism of our monetary policy stance from both sides, my endeavour has been to communicate to you that every monetary policy action involves complex judgement. The supply shocks we confront in the real world are different from pure text book versions; oftentimes they coincide with rising demand pressures. We have to balance growth-inflation concerns.
On top of that, monetary policy actions need to be forward looking even in the face of external uncertainty. This in essence is the dilemma of monetary policy decisions. How do you justify liquidity injection in the midst of a tightening cycle? 19.