Were policy to try to avoid any rise in unemployment, the initial oil price shock might get passed through to continuing inflation. Were policy to try to avoid any rise in inflation, the movement in unemployment would be substantial. The best approach is likely to be to accept some temporary rise in both inflation and unemployment, with the increases being based on underlying objectives.
The Reserve Bank has been monitoring such developments for some time and has been preparing the groundwork in terms of the policies and laws to safeguard the users.