India's inflation target band appropriate for next 5 years: RBI report - Hindustan Times
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India's inflation target band appropriate for next 5 years: RBI report

Reuters | | Posted by Prashasti Singh
Feb 26, 2021 02:25 PM IST

"Trend inflation to which actual inflation converges after a shock provides an appropriate benchmark for the inflation target; trend inflation has fallen from above 9% before FIT to a range of 3.8%-4.3% during FIT," the RBI said in its release.

India's medium-term inflation target of 4% is appropriate for the country under its the central bank's flexible inflation targeting (FIT) mandate, an internal report from the Reserve Bank of India said on Friday.

India adopted the flexible inflation targeting framework in 2016 and the government is due to review the same in the near future.(MINT_PRINT)
India adopted the flexible inflation targeting framework in 2016 and the government is due to review the same in the near future.(MINT_PRINT)

"Trend inflation to which actual inflation converges after a shock provides an appropriate benchmark for the inflation target; trend inflation has fallen from above 9% before FIT to a range of 3.8%-4.3% during FIT," the RBI said in its release.

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India adopted the flexible inflation targeting framework in 2016 and the government is due to review the same in the near future.

"The current numerical framework for defining price stability, i.e., an inflation target of 4% with a +/-2% tolerance band, is appropriate for the next five years," RBI said.

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