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Inflation To Be Brought Down To 6% In 2 Years: RBI

PUBLISHED BY: SURENDER KUMAR
JANUARY 23, 2014

   
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The RBI would try to bring down inflation gradually to 8 % from 10 % over the next 12 months and to 6 % the next 24 months before formally adopting the 4 % recommended target.

The first move is to gradually shift to the 14-day repo rate from the overnight call rate. The RBI will continue to manage liquidity in the banking system with a mix of term repos, overnight repos, and Open Market Operations.  However, the time span over which it could be achieved will vary due to variables like rains, global growth cycle and oil prices.

The Urjit Patel report had highlighted that inflation should be the central reference point for the monetary policy. The committee has also called on the Government to narrow the fiscal deficit to GDP ratio at 3 % by 2016-17.





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