A just published RBi working paper says India‘s trend inflation since 2014 has been 41.-4.3% and hence the CPI target under the current flexible inflation targeting framework should be retained at 4%.
The flexible inflation targeting (FIT) scheme was put in place in 2016 & it comes up for review in March’21. This paper may be read as a hint that RBI is in favour of maintaining the framework as is.
Whats more the paper is co authored by RBi Dep Gov Michael Patra, who is also an MPC member and was member of the Urjit Patel Committee which first recommended inflation targeting at 4%. Patra saying the inflation target be maintained at 4% is significant
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