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Shaktikanta Das said the medium-term inflation outlook is exposed to heightened uncertainties.(File)New Delhi: The Reserve Bank today projected inflation to come down below the upper threshold level of 6 per cent by March quarter of the current fiscal saying the worst of inflation is behind us, but there is no room for complacency in the fight against price-rise.It, however, retained its 6.7 per cent average retail inflation forecast for the current fiscal. The retail or consumer price index (CPI) based inflation has remained above the RBI’s upper tolerance threshold of 6 per cent for 10 months till October.In its monetary policy statement RBI Governor Shaktikanta Das said the central bank will keep ‘Arjuna’s eye’ (keen focus) on the evolving inflation dynamics and projected inflation to remain above 4 per cent for the next 12 months.”Over the next 12 months, inflation is expected to remain higher than the 4 per cent target… While being watchful of the impact of our earlier monetary policy actions, we will keep Arjuna’s eye on the evolving inflation dynamics and be ready to act as may be necessary,” Shaktikanta Das said.The RBI’s interest rate-setting panel on Wednesday hiked benchmark rate by 35 basis points to 6.25 per cent, taking the cumulative rate hikes to 2.25 per cent since May 2022.The RBI said its actions will be ‘nimble’ keeping the aspect of growth in mind. It has cut the GDP growth forecast for current fiscal to 6.8 per cent, from 7 per cent projected in September.The Reserve Bank has the mandate of keeping inflation under 4 per cent, with a band of (+/-) 2 per cent.Shaktikanta Das said the medium-term inflation outlook is exposed to heightened uncertainties from geopolitical tensions, financial market volatility and the rising incidence of weather-related disruptions.In recent times, global commodity prices, including crude oil, have undergone some downward correction, but the resurgence in domestic services sector activity could also lead to price increases, especially as firms pass on input costs.”Taking into account these factors and assuming an average crude oil price (Indian basket) of USD 100 per barrel, headline inflation is projected at 6.7 per cent in 2022-23, with Q3 (October-December) at 6.6 per cent and Q4 (January-March) at 5.9 per cent,” the RBI said.Retail inflation for the first and second quarter of the next fiscal is projected at 5 per cent and 5.4 per cent respectively, on the assumption of a normal monsoon.The pressure points from high and sticky core inflation and exposure of food inflation to international factors and weather-related events do remain.Going forward, food inflation is likely to moderate with the usual winter softening and the likelihood of a bountiful rabi harvest, but pressure points remain in the form of prices of cereals, milk and spices in the near-term. Risks from adverse weather events add to uncertainty in the outlook.Shaktikanta Das said inflation is cooling across the world on softening of the commodity and the oil prices, but stressed that we cannot be “complacent” despite the positive news on inflation. The worst of inflation is behind us, he said in the post monetary policy press conference(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)Featured Video Of The DayRBI Hikes Key Lending Rate, Lowers Growth Estimate



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