Commentary
We often hear from central bank officials that their decisions regarding the interest rate policy is determined by the state of economic conditions as depicted by economic indicators. Policymakers are of the view that, in order to ascertain the state of economic conditions, they require the most recent information on some key economic data such as the gross domestic product (GDP). Thus, an increase in the GDP growth rate is seen as economic growth. A weakening in the growth rate of GDP raises the likelihood that the officials will lower the policy interest rate.
