sentences: in addition, a pre-condition for macroprudential tools to be effective, is that the policy interest rate is first set at an appropriate level for maintaining macroeconomic stability; various studies found that interest rate differential was a less important determinant of capital inflows when compared to other factors such as investors’ assessment of the economic outlook and expectations of future currency movements and; the relatively low interest rate environment, investors can be induced to search for higher returns as well as speculate in riskier assets, especially in real estate and equity markets.