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Review and Assessment of the Formulation and Implementation of Monetary Policy (RAFIMP)

We are required to review and assess how we formulate and implement our monetary policy every 5 years. This report covers the period 2017 to 2022.

The report first looks at the conduct of monetary policy in real time over 3 distinct periods:

  • 2017 to 2019 — Below target inflation
  • 2020 Initial pandemic response
  • 2021 to now Above target inflation

This places monetary policy decisions in the context of the information available to policy-makers at the time. The report then evaluates monetary policy decision-making with the benefit of hindsight, that is, in light of new information that emerged as time progressed.

Key findings

  • Our formulation and implementation of monetary policy over the last 5 years is consistent with the objectives set out in the Remit. The Remit outlines the objectives the Monetary Policy Committee must use to pursue as set by the Minister of Finance. 
  • The last 5 years were uniquely challenging. In particular, COVID-19 was a highly disruptive shock. Monetary policy-makers were faced with widespread uncertainty.
  • There are 9 areas for improvement. These lessons and areas of focus have fed into the extensive work programme we have started around policy design, capability building and informing our research agenda.