RBI to discuss timeline for 2-6 per cent inflation target with govt, says Rajan

Reserve Bank of India (RBI) Governor Raghuram Rajan said on Friday that the central bank will begin talks with the government for an "appropriate timeline" to ensure the economy is within a medium-term inflation target of 2-6 per cent.

"Going forward, we will discuss an appropriate timeline with the government in which the economy should move to the centre of the medium-term inflation band of 2-6 (per cent)," Rajan said in a lecture at an industry event.

The RBI governor added that 'a glide path' towards lowering inflation to those levels worked best for the country by ensuring moderate economic growth.

Rajan also proposed a debate on whether the country needed more institutions "to ensure deficits stay within control and the quality of budgets is high", noting that other countries had independent bodies, which provided opinions on fiscal Budgets.

(Reuters)