India's Central Bank Reaffirms 4% Inflation Target, But Signals Flexibility on Interest Rates

India's monetary policy committee reinforced 4% inflation target as inflation returned to 2-6% comfort zone, but doesn't necessarily signal higher rates for longer.

External MPC member Varma said focus now shifts to bringing inflation to 4% target level.

MPC member Goyal said focus on 4% target doesn't mean rates will stay high; decisions will be data dependent.

Varma said real interest rate of 1% will drive inflation sustainably to 4% target.

Goyal suggested measures like higher capital requirements for fast-growing loans to avoid over-enthusiasm and crash.