6% target inflation to be achieved by January 2016
Q. What is the target inflation to be achieved by January 2016?- Published on 30 Sep 15a. 5%
b. 4%
c. 6%
d. 3%
ANSWER: 6%
- The Centre and RBI signed an agreement under which RBI will prioritize controlling price rise above the other objectives of the monetary policy -interest rates and the foreign exchange rate.
- RBI is committed to bringing inflation below 6 percent by January 2016. The consumer inflation target has been set at 4 percent, with a band of plus or minus 2 percentage points, for the financial year 2016-17.
- Under the agreement, RBI will be deemed to have missed its target if consumer inflation remains above the 6 percent level for three consecutive quarters during 2015-16 or if it remains below 2 percent for three consecutive quarters during the year 2016-17.
- The bank will have to explain to the government the causes, and what steps it intends to take to steer inflation back within a given time if it misses the target.
