Economy
India
on Friday formally implemented its central inflation target of 4 percent, an
important confirmation of the inflation-fighting policies championed by Reserve
Bank of India (RBI) Governor Raghuram Rajan, who steps down next month.
Junior finance minister Arjun Ram
Meghwal tabled a notification in parliament's upper house that confirmed the
target at 4 percent, plus or minus 2 percent, in line with the goal the
government originally agreed with Rajan.
Candidates are also being shortlisted
for the six-member monetary policy committee (MPC), a senior government
official said earlier, but the panel was unlikely to be formed in time for next
Tuesday's RBI policy meeting.
"All I can say is that we are
currently shortlisting candidates (for the MPC). And it won't get formed before
the Aug. 9 policy," the official told Reuters, requesting anonymity,
adding it may be in place in time for Rajan's departure.
Rajan, a former International Monetary
Fund chief economist highly regarded by financial markets, will step down on
Sept. 4 after three years at the helm of the RBI during which his policies
helped to cut inflation in half.
He dropped a bombshell in June by announcing
he would not seek a second term, but has sought to cement his legacy by
completing the shift to formal inflation targeting and staffing up the
six-member MPC before he steps down.
Some senior economists, including
Rajan's predecessor at the RBI Duvvuri Subbarao, have urged India not to fixate
on an inflation target given the need to ensure growth and financial stability.
Intense speculation persists over the
identity of Rajan's successor. Although the field has narrowed, officials in
Prime Minister Narendra Modi's office have not confirmed whether any
announcement is imminent.
Source by Reuters
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