TIL Desk/Business/New Delhi/ Reserve Bank of India (RBI) Governor Shaktikanta Das said monetary policy transmission was steadily improving and was expected to improve further. “Transmission is improving. If you see it was 49 basis points transmission for new loans in the December Monetary Policy Committee (MPC). In February MPC, it has gone up to 69 basis points. So it is steadily improving,” he said.
The RBI is reviewing the retail inflation targeting framework behind policy decision as well as its effectiveness and also plans to hold stakeholders consultations including with the government in June, Das said. To keep inflation under specified level, the government in 2016 had decided to set up MPC headed by RBI governor entrusted with the task of fixing the benchmark policy rate (repo rate).
The six-member panel, which had its first meeting in October 2016, was given the mandate to maintain annual inflation at 4 per cent until March 31, 2021 with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent. “The monetary policy framework is in operation for three and a half years. We have initiated a process of internal review of how the monetary policy framework has worked,” Das told in an interview.
