The level of the broadly defined money supply (M3) at the end of June 2000 was virtually the same as at the end of 1999, whereas M3 had increased at an annualised rate of nearly 19% in the second half of 1999.
This meant more economic slack going into next year than we had previously anticipated, and it would take longer to absorb. In these circumstances, the Bank lowered interest rates again, at the end of August, to support domestic demand growth and to keep inflation near the target of 2 per cent over the medium term.