Live Breaking News & Updates on ஹரேந்திரா குமார் பெஹெரா
Stay updated with breaking news from ஹரேந்திரா குமார் பெஹெரா. Get real-time updates on events, politics, business, and more. Visit us for reliable news and exclusive interviews.
If it ain t broke, don t fix it : RBI working paper says 4% inflation target is good for India Recently there were speculations that the government could ask the MPC to loosen the inflation target to facilitate a growth supportive policy. December 29, 2020 / 09:29 PM IST A Reserve Bank of India (RBI) working paper authored by Harendra Kumar Behera and Michael Debabrata Patra has said maintaining the inflation target at 4 percent is appropriate for India. The paper, titled ‘Measuring trend inflation in India’, said there was a steady decline in trend inflation to 4.1 percent-4.3 percent since 2014. It said fixing an inflation target too below the trend imparts a deflationary bias to monetary policy because it will go into overkill relative to what the economy can intrinsically bear in order to achieve the target. ....
Updated Dec 28, 2020 | 22:23 IST The paper authored by Harendra Kumar Behera and Deputy Governor Michael Debabrata Patra finds a steady decline in trend inflation to 4.1-4.3% since 2014, until just before the pandemic. Representational Image | Photo Credit: IANS Key Highlights A target set too below the trend imparts a deflationary bias to monetary policy, said the paper A target that is fixed above trend renders monetary policy too expansionary and prone to inflationary shocks and unanchored expectation, it further added. India s inflation target is set for review in March 2021 The Reserve Bank of India on Monday issued a working paper on measuring trend inflation in India which is authored by Harendra Kumar Behera and Deputy Governor Michael Debabrata Patra. Released ahead of the review of the inflation target in March 2021, the paper argues that maintaining the inflation target at 4% is appropriate for India. ....
Maintaining 4 per cent inflation is appropriate for India as targeting a lower rate could impart deflationary bias to the monetary policy, said a Reserve Bank paper. Under the current dispensation, the RBI has been mandated by the government to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side. The paper, authored by RBI Deputy Governor Michael Debabrata Patra and another official Harendra Kumar Behera, has found a steady decline in trend inflation to 4.1-4.3 per cent since 2014. A target set too below the trend imparts a deflationary bias to monetary policy because it will go into overkill relative to what the economy can intrinsically bear in order to achieve the target. ....
4% inflation target is ideal as it matches average trend since 2014, says RBI paper SECTIONS Share Synopsis The real time estimate of trend inflation was around 5% till the end of 2013, while it fell steadily to 4.1% in the first quarter of 2019, before rising to breach the 6% upper tolerance limit during the last nine months due to COVID-19 pandemic-led disruptions. Agencies RBI projected CPI to be at 6.8% for the third quarter, 5.8% for the fourth quarter and 5.2-4.6% in the first half of next fiscal. A 4% inflation target for the Indian Monetary Policy Committee is just ideal as it matches with the average trend inflation measured since 2014, a Reserve Bank of India research paper said. ....
India’s inflation target should be maintained at 4%: RBI Working Paper By IANS| Published: 28th December 2020 11:27 pm IST New Delhi, Dec 28 : India’s inflation target should be maintained at 4 per cent in the medium term, according to a working paper by the Reserve Bank of India (RBI). The paper, published by the RBI’s Department of Economic and Policy Research, noted that central to monetary policy is the concept of ‘Trend Inflation’ to which actual inflation outcomes are expected to converge after short-run fluctuations die out. Accordingly, the inflation target needs to be fixed in alignment with trend inflation to avoid unhinging inflation expectations and flattening the aggregate supply curve or imparting a deflationary bias to the economy. ....