The Reserve Bank of India describes a flexible inflation-targeting framework with price stability as the primary objective while keeping growth in mind. The central government sets the CPI-based target in consultation with the RBI, and the Monetary Policy Committee determines the policy rate. Its operating explanation distinguishes the policy repo rate from the weighted average call rate, which liquidity management seeks to align with that signal. Standing facilities, reserve requirements and market operations have separate roles in implementation. A target, a policy decision and an observed money-market rate therefore need to retain their own definitions.
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