Operation of monetary policy

This article covers the three months mid-February to mid-May 1984.

Domestic monetary conditions-though not without particular areas of uncertainty-remained satisfactory judged overall during the three months under review, and policy continued to exert moderate downward pressure on the rate of inflation, as intended. Nevertheless, financial markets went through a period of severe turbulence largely under the impact of developments in the United States. In operating monetary policy, the Bank, having endorsed a ½% reduction in the general level of short-term interest rates around the time of the Budget, leant against the subsequent spasmodically strong upward market pressures with the aim of moderating the rise in rates.

Operation of monetary policy