This stability is due, in substantial measure, to our predecessors' success in bringing inflation under control after the 1970s. We cannot be certain, however, about the durability of this legacy. If a central bank enjoys a high degree of credibility with its stakeholders, the anchoring of inflation expectations gives policymakers some scope for supporting real activity in the face of adverse shocks.
The HSF Act approved by Parliament in March of last year, is therefore a most important piece of legislation. In line with international best practices, the legislation provides for clear deposit and withdrawal rules; a governance structure that seeks to incorporate checks and balances and provisions to ensure the highest level of transparency and accountability in the management of the country’s money.