The Reserve Bank of India is expected to detail the results of its internal review of the monetary policy framework later this month, a banking industry source told Cogencis. "Substantial work has been done by the RBI on how the framework has helped in tempering inflation expectations," the source said.

"Obviously, COVID-19 has caused some issues but the report will comprehensively analyse this too." The review of the framework will be detailed in the central bank's report on currency and finance. The last currency and finance report of the RBI was released in March 2013 and was on fiscal and monetary co-ordination.

The RBI's internal review of the monetary policy framework is separate from the review of the CPI inflation target, which is to be reviewed every five years. The government, in consultation with the central bank, must decide if the current target of 4% in a band of 2-6% should be retained for the five years starting Apr 1. The internal review of the flexible inflation targeting-based monetary policy framework was to have examined the functioning of the system and suggest a way forward.

As such, its purview goes beyond just the numerical CPI inflation target. The current monetary policy framework was adopted in late 2016, with a six-member Monetary Policy Committee voting on the policy interest rates keeping in mind the inflation and growth objective.

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