War on inflation is almost won: RBI Governor Das

MUMBAI: The Reserve Bank on Wednesday retained the retail inflation projection at 4.5% for fiscal 2025, with Governor Shaktikanta Das stressing that the central bank will have to closely monitor the price situation given the rising risks to imported inflation as crude prices have vaulted over 18% in the past one week following the flare up war between Israel and Iran.

Das offered some banter to the press when he quipped, in response to a media query, as to how the inflation description has moved from ‘a wild elephant’ till recently to a ‘nearly tamed horse’, saying “in a war, both elephants and horses are used and that if needed the RBI will deploy again the arsenals from Arjuna to sharpen its attack and focus.”

When inflation was sticky for long and sticking around in double-digit, Das used to repeatedly say that the RBI MPC will not rest till the elephant is sent back to forest and ensured that the wily animal remains there for a durable time so that the economy grows at a higher pace sustainably longer.

However, the RBI monetary policy committee (MPC) retained the CPI projection for FY25 at 4.5%, with Q2 at 4.1%; Q3 at 4.8%; and Q4 at 4.2%. CPI inflation for Q1FY26 is projected at 4.3%. Unveiling the bi-monthly monetary policy, the governor said the flexible inflation targeting (FIT) framework, which has completed eight years since its introduction in September 2016, is a major structural reform of the 21st century India.