Current inflation targeting framework 'appropriate' for next five years: RBI

The present inflation target of 2 to 6 percent is appropriate for the next five years to ensure price stability, the Reserve Bank of India said in its report on currency and finance on February 26.The observation is significant amid speculation that the government may ask the central bank to relax inflation targets to shore up the economy.“Threshold inflation above which growth is unambiguously impaired ranges between 5 and 6 percent in India, indicating that an inflation rate of 6 percent is the appropriate upper tolerance limit for the inflation target,” the RBI report said.

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