Since the second quarter of 2005 monetary policy was tightened as the headline inflation, measured by Consumer Price Index (CPI), reached close to 11.1 in April 2005 - edging beyond the yearly target of 8% with Wholesale Price Index (WPI) pointing to the risk of moving to double digits.
It has to be further recognized that given structural issues, the inflation threshold for developing countries is high inflation in excess of 8- 12% is found to hurt economic growth.