With reference to the Inflation targetingmonetary policyframework, consider the following statements:1. In 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of theflexible inflation targeting framework.2. The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

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With reference to the Inflation targeting monetary policy framework, consider the following statements:

1. In 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.

2. The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.

Which of the statements given above is/are correct?

a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2

Correct answer is option 'C'. Can you explain this answer?

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With reference to the Inflation targetingmonetary policyframework, con...

In its bimonthly monetary policy statement in February, the Reserve Bank of India (RBI) has kept the key policy rates unchanged.

Inflation targeting monetary policy framework:

In May 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of the flexible inflation targeting framework.
The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.
Accordingly, the Central Government has notified 4 per cent Consumer Price Index (CPI) inflation as the target for the period from August 5, 2016 to March 31, 2021 with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.
The Monetary Policy Committee (MPC) constituted by the Central Government determines the policy interest rate required to achieve the inflation target.

Hence both statements are correct.

Answered by Notes Wala · View profile

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With reference to the Inflation targetingmonetary policyframework, consider the following statements:1. In 2016, the Reserve Bank of India (RBI) Act, 1934 was amended to provide a statutory basis for the implementation of theflexible inflation targeting framework.2. The amended RBI Act also provides for the inflation target to be set by the Government of India, in consultation with the Reserve Bank, once in every five years.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?

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