ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Inflation targeting is focused mainly on achieving a low and stable inflation, supportive of the economy’s growth objective. This approach entails the announcement of an explicit inflation target that the BSP promises to achieve over a given time period.

Detailed explanation-2: -Typically, inflation targeting is part of monetary policy relating to the money supply, and it is conducted by a nation’s central bank. The United States central bank, the Federal Reserve System, adjusts the money supply to try and maintain both an interest rate target and an inflation rate target.

Detailed explanation-3: -Inflation targeting is a central bank strategy of specifying an inflation rate as a goal and adjusting monetary policy to achieve that rate. Inflation targeting primarily focuses on maintaining price stability, but its proponents also believe that it supports economic growth and stability.