MUMBAI, March 5 -- The Reserve Bank of India (RBI) said on Friday, 26 February, it is in favour of retaining the existing inflation target set in 2016 for the next five years, ahead of an upcoming government review.
Under India's flexible inflation targeting (FIT) approach, the central bank is expected to work to maintain retail inflation at 4%, with an upper tolerance limit of 6% and a lower limit of 2%. The sixmember monetary policy committee (MPC) headed by the RBI governor decides on policy rates keeping this target in mind.
Mint reported on 28 January that the government may reset the rate at 5% to provide the central bank more leeway to cut policy rates and support growth in the pandemic-struck economy.
"The current numerical frame...