These were taken with the objective of maintaining the appropriate functioning of the monetary policy transmission mechanism and restoring price stability. This fundamental shift in the risk profile of central banks’ response is an integral part to performing our role and to fulfilling our mandate of bringing inflation below but close to 2 per cent over the medium term.
This is driven in part by the increasing market competition as a result of liberalization and the adoption of more stringent global standards. However, we are not discounting the role that smaller specialist banks play in the evolving financial landscape. Definitely, we need smaller specialist players that can more effectively cover important niche markets that have their own unique needs.