Is flexible inflation targeting still fit for the purpose it must serve? Photo: MintPremium Share Via Read Full Story Is ‘flexible inflation targeting’ (FIT) ripe for a coup d’état that topples its almost three-decade grip on the ruling dispensations of central banks the world over? Pioneered by New Zealand as early as 1990, and soon emulated by Canada and the United Kingdom, FIT is now the de jure, or de facto, monetary policy of most major advanced and emerging market central banks, including the Reserve Bank of India (RBI). Doubts about whether FIT was fit for the purpose began to grow after the global financial crisis of 2007-2009 and its aftermath. As this column has discussed several times, a monetary policy fixated solely on consumer price inflation (CPI), or some variant, failed to react to asset price bubbles that eventually burst and threatened to topple the entire global monetary and financial edifice.