Mumbai: Outgoing deputy governor of the Reserve Bank of India, Viral Acharya, credited flexible inflation targeting, low crude prices and efficient food supply management for successful taming of headline inflation in recent years, on Saturday. The RBI shifted to a flexible inflation targeting with a headline target of 4% (+/- 2%) when the Monetary Policy Committee (MPC) was instituted in 2016. "The important reform of flexible inflation targeting, helped by low oil prices and better food supply management, has kept the headline inflation under control during the last five years, relative to the mandated target," Acharya was quoted as saying in a statement on the RBI website. Though the equity market remains the largest segment, G-Secs, SDL and corporate bond markets have also grown steadily. "Better financialisation of household savings could be a catalyst for retail participation in markets, which in turn can provide a boost to collective investment vehicles such as mutual funds and alternative investment funds," Acharya said.

Source: Mint June 29, 2019 16:07 UTC