The Reserve Bank on Friday retained inflation projection at 4.5 per cent for the current financial year, lower than 5.4 per cent in the last fiscal.

Assuming a normal monsoon this year, CPI (consumer price index-based) inflation for the current year is projected at 4.5 per cent, with Q1 at 4.9 per cent, Q2 at 3.8 per cent, Q3 at 4.6 per cent, and Q4 at 4.5 per cent.

Reserve Bank Governor Shaktikanta Das also stressed on the need to remain vigilant on food prices, given the forecast of higher temperatures between April-June.

He also said that the impact of reduction in fuel prices on inflation will deepen in the coming months.

Das, however, said the elephant (inflation) seems to have gone for a walk and RBI wants it to remain in the forest.

The central government has tasked the Reserve Bank of India (RBI) to ensure that the Consumer Price Index (CPI) based inflation remains at 4 per cent, with a margin of 2 per cent on either side. The retail inflation was 5.1 per cent in February. March inflation print is scheduled to be released next week.

The Monetary Policy Committee (MPC) on Friday kept benchmark policy interest rates unchanged for the seventh time in a row.