The Reserve Bank of India should make managing inflation its main objective and set monetary policy by committee, a central bank panel has recommended, a shift that would bring its practices in line with many other central banks.
The recommendations are widely expected to be accepted. They were issued late on Tuesday by the panel set up by RBI Governor Raghuram Rajan, which also recommended using consumer prices as the primary measure of price changes and setting an eventual inflation target of 4 percent.
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The reforms are aimed at making policy-setting more effective and transparent in a country that has long struggled with high inflation.
They would mark the most dramatic change implemented by the 50-year-old Rajan, a high-profile former chief economist at the International Monetary Fund, who took office on Sept. 4 with an ambitious agenda and amid high expectations.