A related challenge to the inflation targeting framework has been dealing with large exchange rate changes which were primarily responsible for the deviations from target experienced in 2002–3 and to some extent in 2014. Although pass-through from the exchange rate to CPI has declined significantly over the period, it remains an important driver  2  BIS central bankers’ speeches  of inflation.
A chronology of policy measures is given in Annex II. Currency intervention and monetary policy In order to stabilize the domestic currency market, the Reserve Bank intervened in the forex market by selling dollars during June to September 2013 (Chart 6).