Indian govt keeps RBI's inflation target unchanged at 4% for next five years
The Indian government has renewed the Reserve Bank of India's inflation target of 4% with a tolerance band of 2% on either side for another five years. The decision aims to keep retail inflation in check, with the upper limit at 6% and the lower limit at 2%, and is based on the RBI's review that the framework has broadly worked well since its introduction in 2016.
The Indian government has renewed the Reserve Bank of India's inflation mandate. The target remains at 4% with a tolerance band of 2% on either side. This means the upper limit stays at 6% and the lower limit at 2%. The decision is for another five years, ending March 2031. The RBI uses this target as its anchor when deciding on interest rates. Retail inflation in India is currently at 3.21%, within the mandated band.
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