That has since been embedded in inflation expectations as noticed in severe adverse reactions when WPI exceeded five per cent. In the RBI’s Annual Policy of 2007-08, we indicated a self-imposed informal inflation mandate over the medium  BIS Review 62/2007  7  term to be in the range of 4.0 to 4.5 per cent.
The goal is to anchor inflation expectation in India so as to align them with the global levels, as soon as possible for ensuring smooth economic integration with the global economy. Use of prudential measures Financial stability has emerged as one of the key considerations in the conduct of monetary policy.