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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 g...

UBS economist’s advice to RBI: Time to go easy on money printing SECTIONS Share Synopsis It will not be easy for RBI to walk back on its stance but policy normalisation is going to be the next buzz word. ETMarkets.com The Reserve Bank of India’s ultra-accommodative liquidity policy has helped maintain sanity in the domestic financial markets during the Covid-19 pandemic. But with the economy expected to rev up in the coming years, a debate is raging if it is time for the central bank to think about how it will normalise its policy stance. “While RBI has talked about maintaining an accom...

“The experience with successfully maintaining price stability and the gains in credibility for monetary policy since the institution of the targeting framework, barring the Covid-19 period, needs to be reinforced in the coming years,” the governor said Friday.

RBIs Monetary Policy Committee has been following a mandate to keep consumer price index (CPI) at 4%, with a 2% tolerance band on either side since 2016.