Art of Monetary Policy Making: The Indian Context – A Speech by Shri Shaktikanta Das, Governor, Reserve Bank of India – September 5, 2023

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Summary:
The Indian economy has transitioned to a flexible inflation targeting (FIT) framework to maintain price stability, with a target of 4.0% inflation rate and a tolerance band of +/- 2%. The Reserve Bank of India (RBI) employs unconventional measures and forward-looking monetary policy to achieve this goal. The RBI has prioritized inflation control over growth, increasing the policy repo rate by 250 basis points between May 2022 and February 2023, citing global inflationary pressures and concerns over food price shocks.