Questions We Can Help to Answer
Instructions:

Based on the article, write a short essay (300 – 600 words) about the rationale of the Bank’s policy
position. You might want to link the policy announcement to your understanding of the monetary
policy transmission mechanism. What does “no change” mean versus the alternative of, perhaps,
raising the Bank’s policy interest rate to 1.25 percent? How would you expect financial markets and
financial institutions and the exchange to respond? It has been almost two weeks since the
announcement and so your commentary might benefit from looking at what actually happened in the
markets and with the exchange rate since the announcement. Other perspectives are welcome.