{"id":13879,"date":"2025-08-22T13:52:52","date_gmt":"2025-08-22T08:22:52","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=13879"},"modified":"2025-08-22T13:52:52","modified_gmt":"2025-08-22T08:22:52","slug":"rbi-monetary-policy-framework-4-percent-cpi-target","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/rbi-monetary-policy-framework-4-percent-cpi-target\/","title":{"rendered":"RBI Releases Discussion Paper on Monetary Policy Framework"},"content":{"rendered":"<p data-start=\"605\" data-end=\"882\">The Reserve Bank of India (RBI) has released a discussion paper to review the current Monetary Policy Framework (MPF), inviting feedback from stakeholders on key aspects of India\u2019s inflation-targeting regime. The central bank has sought responses by September 18.<\/p>\n<p data-start=\"884\" data-end=\"924\">The RBI has raised critical questions:<\/p>\n<ul data-start=\"925\" data-end=\"1164\">\n<li data-start=\"925\" data-end=\"997\">\n<p data-start=\"927\" data-end=\"997\">Should the 4% CPI inflation target be retained as the benchmark?<\/p>\n<\/li>\n<li data-start=\"998\" data-end=\"1098\">\n<p data-start=\"1000\" data-end=\"1098\">Does the current tolerance band of 2\u20136% remain suitable, or should it be revised or removed?<\/p>\n<\/li>\n<li data-start=\"1099\" data-end=\"1164\">\n<p data-start=\"1101\" data-end=\"1164\">Should monetary policy focus on headline CPI or core CPI?<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1166\" data-end=\"1381\">The discussion also explores whether India should move from a fixed target to a range-based target, though the RBI cautioned that such a shift may reduce credibility and create ambiguity in interpretation.<\/p>\n<p>Also Read: <a href=\"https:\/\/www.niftytrader.in\/content\/shreeji-shipping-ipo-gmp-key-details\/\">Shreeji Shipping IPO Opens for Subscription<\/a><\/p>\n<h2 data-start=\"1383\" data-end=\"1410\">Background and Trends<\/h2>\n<p data-start=\"1412\" data-end=\"1707\">India adopted the flexible inflation targeting framework in 2016, with a CPI target of 4% within a 2\u20136% band. Since then, inflation has stayed within the lower 2\u20134% range in 11 quarters, the 4\u20136% range in 14 quarters, while breaching the upper limit nine times\u2014mostly during 2020\u20132022.<\/p>\n<p data-start=\"1709\" data-end=\"1859\">The RBI highlighted that if India had chosen a 4\u20136% range instead of the fixed 4% target, policy \u201cfailures\u201d would have been recorded more often.<\/p>\n<h3 data-start=\"1861\" data-end=\"1882\">Market Insights<\/h3>\n<p data-start=\"1884\" data-end=\"2126\">The paper indicates that headline CPI may be a better benchmark than core inflation, as food and fuel account for over half of India\u2019s CPI basket. Policymakers believe ignoring these components would not reflect the true cost of living.<\/p>\n<h3 data-start=\"2128\" data-end=\"2146\">Key Insights<\/h3>\n<ul data-start=\"2148\" data-end=\"2327\">\n<li data-start=\"2148\" data-end=\"2206\">\n<p data-start=\"2150\" data-end=\"2206\">RBI seeks feedback on retaining the 4% CPI target.<\/p>\n<\/li>\n<li data-start=\"2207\" data-end=\"2256\">\n<p data-start=\"2209\" data-end=\"2256\">Debate on headline vs core CPI continues.<\/p>\n<\/li>\n<li data-start=\"2257\" data-end=\"2327\">\n<p data-start=\"2259\" data-end=\"2327\">Credibility and flexibility of the framework are under review.<\/p>\n<p><i>Click here to explore: <a href=\"https:\/\/www.niftytrader.in\/\">NiftyTrader<\/a><\/i><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>The Reserve Bank of India (RBI) has released a discussion paper to review the current Monetary Policy Framework (MPF), inviting feedback from stakeholders on key aspects of India\u2019s inflation-targeting regime. The central bank has sought responses by September 18. The RBI has raised critical questions: Should the 4% CPI inflation target be retained as the [&hellip;]<\/p>\n","protected":false},"author":7,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1362],"tags":[],"ppma_author":[1384],"class_list":{"0":"post-13879","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-and-economy-news"}," _eael_post_view_count":0,"authors":[{"term_id":1384,"user_id":7,"is_guest":0,"slug":"jitesh-kanwariya","display_name":"Jitesh Kanwariya","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/08\/Jitesh-Kanwriya.jpeg","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/08\/Jitesh-Kanwriya.jpeg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/13879","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=13879"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/13879\/revisions"}],"predecessor-version":[{"id":13881,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/13879\/revisions\/13881"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/13880"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=13879"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=13879"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=13879"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=13879"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}