While foreign investment flows both ways, in net terms it has flowed from Asia mainly to the United States and has underpinned the level of the US dollar, despite the US current account deficit, and provided easy access to finance for US borrowers in the business, household and government sectors. 3. How does this explanation fit the five questions?
The Reserve Bank’s “multiple indicator framework” adopted in 1998 and refined since then, in fact, subsumes a flexible inflation objective framework over the medium-term. Under this framework, while we strive for a balance among multiple objectives with the relative weights assigned to each objective varying as dictated by the prevailing macroeconomic context, we aim to achieve a medium-term inflation target.