RBI Panel Likely to Advise India Retains 4% Inflation Target

An internal committee of the Reserve Bank of India is in favor of retaining the current inflation target in an upcoming government review, according to people familiar with the matter, giving investors some reassurance about the continuity of monetary policy.

The panel will likely recommend the RBI ask the government to keep the target at 4%, with a tolerance band of 2%-6%, the people said, asking not to be identified because the discussions are private. The panel is also in favor of retaining the consumer price index as the target, they said, instead of using a measure that excludes food, as some government officials have argued.