Inflation Targeting Framework

Inflation targeting is a monetary policy strategy where a country's central bank sets a specific inflation rate—usually around 2%—as its goal. It actively manages interest rates and other tools to keep inflation close to this target. The purpose is to provide price stability, which helps consumers and businesses plan for the future, supporting sustainable economic growth. This approach promotes transparency and accountability, as the central bank publicly commits to its inflation goal and adjusts policies as needed to meet it.