MUMBAI (Reuters) – The Indian central bank will collaborate with the government to improve the inflation targeting framework and to obtain the ‘Goldilocks conditions’ for inflation and growth through appropriate monetary and fiscal policies, said Governor Sanjay Malhotra in an opinion piece published on Monday.
India adopted the flexible inflation targeting framework (FIT) in 2016, which mandates the Reserve Bank of India to guide inflation towards a target of 4%, keeping it within a +/- 2% range on either side.
The inflation target, to be revised once every five years by the government in consultation with the RBI, is due for the next review in 2026.
The RBI shall continue to be supportive to manage excessive volatility without targeting any particular level or band of exchange rate, Malhotra wrote in the local newspaper, the Times of India, as part of the commemoration of the central bank’s 90th anniversary.
The RBI will endeavour further to improve transparency, enhance consultation, coordination and collaboration and raise accountability through various measures, he reiterated.
“We’ll continue to be proactive, agile and flexible in our attempt to support economic growth,” the governor said.
The central bank will continue to take initiatives to internationalise the rupee and globalise the country’s payment systems, he added.
(Reporting by Swati Bhat and Siddhi Nayak; Editing by Janane Venkatraman)
