Which of the following is a feature of the Indian monetary policy framework since 2016?
A. Exchange rate targeting
B. Flexible inflation targeting with CPI as the nominal anchor
C. Monetary targeting with M3 as the sole intermediate target
D. Multiple indicator approach without a nominal anchor
Answer: Option B
Solution (By JKSSB Mock Tests)
India adopted a Flexible Inflation Targeting framework in 2016, with CPI inflation as the nominal anchor and a target of 4% with a tolerance band of ±2%.
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