New Delhi, Aug. 27 -- Caution is the hallmark of central banks across the world. That perhaps explains why the US Federal Reserve, which has just completed its five-yearly review of its monetary policy framework, and the Reserve Bank of India (RBI), which is in the process of doing so, have opted largely in favour of the status quo.

The Fed, in its Revised Statement on Longer-Run Goals and Monetary Policy Strategy released on 22 August, declared its intent to continue with its 2% inflation target. Likewise, RBI, in its Discussion Paper Review of Monetary Policy Framework released a day earlier, argues strongly in favour of retaining the core principles of the existing framework.

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