RBI signals current inflation regime could be retained

The central bank said on Thursday the current inflation-targeting framework has worked well for the economy and signalled it could be kept intact, as the authority sought stakeholder views on the path ahead in a discussion paper.

- Reuters

With the current framework up for review by April 2026, the Reserve Bank of India (RBI) has sought input on whether 4% remains the optimal inflation target and if the tolerance band of 2 percentage points on either side should be changed or removed.

It has also asked for views on whether the target should remain headline inflation or be changed to core inflation. The news comes a year after a government report urged a rethink of the framework, as food and vegetable prices had caused frequent inflation spikes recently. Members of RBI's rate-setting panel had then too suggested continuing with the present framework.