Flexible Inflation Targeting (FIT)

Recommended by- RBI Deputy Governor Urjit Patel

In a historic monetary policy overhaul, the finance ministry and the Reserve Bank of India (RBI) have agreed to put in place a monetary policy framework to focus on flexible inflation targeting, something the central bank has been pressing for.
The formalisation of the inflation targeting framework by the Reserve Bank of India (RBI) and Government of India is a big step in accepting the fact that a low and steady inflation rate is the major contribution that monetary policy can make to economic growth and macroeconomic stability.

What is Flexible inflation targeting (FIT) ?

Inflation targeting is an economic policy in which a central bank estimates or decides for a medium-term target inflation rate and makes public this "inflation target". Then the central bank attempts to steer with short-term instruments at its own discretion actual inflation towards this target through the use of interest rate changes and other monetary tools.

Because interest rates and the inflation rate tend to move in opposite directions, the likely moves of the central bank to raise or lower interest rates become more transparent under the policy of inflation targeting. Examples:

if inflation appears to be above the target, the bank is likely to raise interest rates. This usually (but not always) has the effect over time of cooling the economy and bringing down inflation.

if inflation appears to be below the target, the bank is likely to lower interest rates. This usually (again, not always) has the effect over time of accelerating the economy and raising inflation.

All Eyes On Target

Portion of monetary policy framework came into effect on February 20, 8 months after it was proposed by the FM
CPI inflation target for January 2016 has been set at less than 6%; 2-6% from 2016-17
RBI will be considered to have failed if inflation exceeds 6% for 3 consecutive quarters from 2015-16 and if it falls below 2% for 3 consecutive quarters from 2016-17
If RBI fails to meet targets, it will have to state the reasons for this and propose remedial action Monetary policy committee will decide on RBI’s stance.

Bank PO V/S Bank SO - What to choose?

Written by - Competition Zenith Dear Readers, As many of you have cleared Bank PO and Bank So as well or going to write both the exams next time. We must congratulate you in clearing two of the most elite bank exams in India. We know that it must be a matter of great confusion and concern that which job is good for you. So we have made a detailed analysis of both the jobs for you. with their pro and cons. It is now up to you to decide. Happy reading. Probationary Officer (PO)/Management Trainee (MT) A Probationary officer (PO) or a Management Trainee (MT) is the first level to enter the banking world. He or she reports to immediate seniors who evaluate his performance in the tasks assigned to him. Initially, a Probationary Officer can be assigned any work from a wide gamut of ongoing banking activities. Normally the probation period is of two years in which the officer is exposed to different types of banking related works. In some banks, the duration may be limi...

Rules Regarding OBC and Creamy Layer Certificates in SSC Exams

1. OBC certificate is valid for as long as the community is notified as OBC certificate treated valid by SSC for 3 years. 2 .It is necessary for everyone to get the OBC certificate renewed after every three years for SSC exams as creamy layer status may change if a person remains in creamy layer for 3 years continuously.

Trigonometry And Its Short Tricks

Trigonometric Function Trigonometric Functions (Right Triangle) Special Angles Trigonometric Function Values in Quadrants II, III, and IV Examples: Example2: Example: 3: Unit Circle Addition Formulas: cos(X+Y) = cosXcoxY – sinXsinY cos(X-Y) = cosXcoxY + sinXsinY sin(X+Y) = sinXcoxY + cosXsin sin(X-Y) = sinXcoxY – cosXsinY tan(X+Y) = [tanX+tanY]/ [1– tanXtanY] tan(X-Y) = [tanX-tanY]/ [1+ tanXtanY] cot(X+Y) = [cotX+cotY-1]/ [cotX+cotY] cot(X-Y) = [cotX+cotY+1]/ [cotX-cotY] Sum to Product Formulas: cosX + cosY = 2cos [(X+Y) / 2] cos[(X-Y)/2] sinX + sinY = 2sin [(X+Y) / 2] cos[(X-Y)/2] Difference to Product Formulas cosX - cosY = - 2sin [(X+Y) / 2] sin[(X-Y)/2] sinX + sinY = 2cos [(X+Y) / 2] sin[(X-Y)/2] Product to Sum/Difference Formulas cosXcosY = (1/2) [cos (x-Y) + cos (X+Y)] sinXcoxY = (1/2) [sin (x+Y) + sin (X-Y)] cosXsinY...

Competition ZENITH

Search This Blog