Inflation target

The Central Bank’s principal objective is to contribute to price stability. On 27 March 2001, a formal inflation target was adopted, with price stability defined as a twelve-month inflation rate of 2½%. The Bank’s role is to attempt to keep inflation as close to the target as possible, on average. If it deviates by more than 1½ percentage points in either direction, the Bank must submit a public report to the Government, explaining the reasons for the deviation and the means by which it intends to bring inflation back to target. The inflation target is described more fully in the joint declaration of the Bank and the Government