RBI: inflation could spur shift in stance |ForumIAS

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Context:

RBI Governor Urjit Patel observed that consumer price inflation was the main yardstick to determine policy rates.

Why in news?

The Monetary Policy Committee of the Reserve Bank of India (RBI) could shift from its current ‘neutral’ policy stance to a ‘withdrawal of accommodation’ stance if headline inflation projection for the year ahead remained well above the target.
RBI has a mandate with keep retail inflation between 2% and 6%, decided at its sixth bimonthly policy review to keep interest rates unchanged, while maintaining a neutral stance.
RBI Governor Urjit Patel observed that consumer price inflation — the main yardstick to determine policy rates — had accelerated for a six consecutive month in December.
Inflation was getting generalised with rising input prices.