2010.09.2008:46:00UTC+00Indian Cbank chief says impractical to target inflation given less policy transmission

News

• India's Cbank governor Duvvuri Subbarao said that it is impractical to target inflation given less effective policy transmission.
• The RBI has in various statements made it clear that it was not in favour of inflation targeting.
• Subbarao added that the capital flows are just needed to meet current account deficit and said that forex reserves build up is by product of exchange rate policy.

Background

• The RBI last Thursday extended its fight against inflation, but signalled that a tightening cycle that has seen five rate hikes this year may be nearing an end.