Further, it examines the voting pattern of the MPC in India and compares this with that of various developed and emerging economies. It highlights the importance of unconventional monetary policy measures in supplementing conventional tools especially during the easing cycle. It also describes the monetary policy transmission process and its limitations in terms of lags and rigidities. In this backdrop, the paper reviews the evolution of monetary policy frameworks in India since the mid-1980s. The Consumer Price Index (CPI combined) inflation target was set by the Government of India at 4% with ± 2% tolerance band for the period from Augto March 31, 2021. With this step towards modernization of the monetary policy process, India joined the set of countries that have adopted inflation targeting as their monetary policy framework. In 2016, the monetary policy framework moved towards flexible inflation targeting and a six member Monetary Policy Committee (MPC) was constituted for setting the policy rate.
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