The cornerstone of our monetary policy approach is an explicit inflation-control target. The current target range of 1 to 3 per cent, with emphasis on the 2 per cent midpoint, was established jointly by the Bank and the government under an agreement that runs until the end of 2001.
An announcement regarding a new agreement to extend beyond 2001 will be made well before the end of the year. In a world that is subject to all kinds of shocks and with financial markets increasingly more open and globalized, monetary policy actions stand a better chance of being effective if they are more predictable and better understood by the public.