Inflation target breach: RBI committee will meet to draft report for Govt

 

In eight years, this will be the first time the RBI would have let retail inflation slip beyond the upper tolerance limit of 6 per cent for three straight quarters.

The Reserve Bank of India will call a special meeting of its Monetary Policy Committee (MPC) after October 12 to discuss a report it will have to submit to the Union government explaining the reasons for the average retail inflation remaining above the upper tolerance limit of 6 per cent for three consecutive quarters.

The Union government, in consultation with the RBI, fixes the inflation target for the central bank every five years. It had fixed it at 4 per cent plus/ minus 2 per cent (upper limit 6 per cent, lower limit 2 per cent) for the period August 5, 2016 to March 31, 2021, and retained it for the next five years ending March 31, 2026.