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To that end we have raised required reserve ratios to control the rapid credit expansion by restricting the supply of loanable funds. Another issue we considered is lengthening the maturity of capital inflows. This is important for improving the quality of capital account, limiting maturity mismatches, and avoiding exchange rate misalignments. To this end, we lowered the policy rate and widened the corridor between overnight borrowing and lending rates so as to create some extra volatility in the short-term interest rates. Although it looks quite complicated at first sight, the framework we adopt in spirit is not significantly different from the conventional inflation targeting framework. The only difference is that, previously our policy instrument was the one week repo rate, but now our instrument is a “policy mix”—which consists of a combination of short term interest rates, reserve requirement ratios and interest corridor. We seek to use these instruments in right combination in order to cope with both inflation and macro-financial risks. The monetary policy stance in this framework is not only determined by the path of policy rates, but as a mixture of all policy instruments outlined above. Just like the conventional inflation targeting framework, the policy is forward looking and contingent on the economic outlook. The exact  4  BIS central bankers’ speeches  setting of the policy mix depends on the factors affecting price stability and financial stability. Although it is too early to assess the success of these policies, initial impact so far seems promising.