In more recent times, the policy rate has generally followed the US Federal Fund rate (with slight variations) and with rapidly increasing oil prices the exchange rate has strengthened slightly, which is consistent with the need to tame inflationary pressures (see Figure 2) Looking to the future, the inflation targeting system still needs to be backed up by a legal framework. A revised Bank of Thailand Act has been in the works for some time, which will provide the legal framework for monetary policy and also protect the system from political interference. Apart from the legal framework, the inflation target range should also be narrowed in the future. The broad range in use up until now has helped to promote the credibility of the system." However, it can also create confusion about the direction of monetary policy. If the core inflation lies well within the targeted range then many policy stances are consistent with the target. Now that the system is well established, a narrower target range (possibly something 2.0-3.5%) should be able to guide market sentiments like better.