India: Fixing Central Bank Mandates
The lower house of the Indian parliament, Lok Sabha, on Thursday approved legislation giving the central bank a mandate to target inflation through monetary policy (Reuters, LiveMint). The bill, which is being called the Finance Bill, sets up a seven-member monetary policy panel that will include three representatives of the government, three representatives of the central bank and the governor of the Reserve Bank of India. The panel will set interest rates through a majority vote, a practice followed by major central banks globally. At present, the governor of the Reserve Bank of India is the sole authority to decide monetary policy. The panel will be reviewing inflation targets every five years.
The lower house of the Indian parliament, Lok Sabha, on Thursday approved legislation giving the central bank a mandate to target inflation through monetary policy (Reuters, LiveMint). The bill, which is being called the Finance Bill, sets up a seven-member monetary policy panel that will include three representatives of the government, three representatives of the central bank and the governor of the Reserve Bank of India. The panel will set interest rates through a majority vote, a practice followed by major central banks globally. At present, the governor of the Reserve Bank of India is the sole authority to decide monetary policy. The panel will be reviewing inflation targets every five years.
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