In a major boost to India's sovereign outlook, Moody's today said the new 'inflation targeting' mechanism is a "credit positive" move and it would make RBI's monetary policy tools much more effective. Under the new 'inflation targeting' mechanism, the government has mandated RBI to bring down inflation to below 6 per cent by January 2016 and then target a level of 4 per cent by March next year. RBI will have to explain the reasons if such targets are not achieved. The Credit Rating Agency Moody's said that the new mechanism would increase the predictability and effectiveness of RBI's monetary policy. The effectiveness of RBI's monetary tools would increase because 'inflation targeting' would take into account future– rather than past– price trends, says Moody's.