Improved policy performance towards the goals of price and financial stability has resulted in lesser volatility of interest rates, which in itself is good for long-term economic growth as it helps to smooth economic cycles and reduces the uncertainty that investors face when they assess capital spending opportunities.
Between 2014 and 2016, the policy rate increased by 200 basis points over a period of 26 months. By contrast, the previous tightening cycle, which began in 2006, saw the repo rate rise by 500 basis points over a period of equal duration.