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mpc: 6. The decline in market interest rates was probably one factor behind the depreciation of sterling. The sterling effective exchange rate index (ERI) had fallen by nearly 3% since the February Inflation Report and was now back within the relatively narrow band it had occupied over the past decade. Some of the depreciation had occurred during the period of market volatility at the end of February. That may have partly reflected the selling of sterling assets by those investors who were reducing their carry-trade exposure.