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The Reserve Bank remains focused to bring back retail inflation to 4% over a period of time in a non-disruptive manner, governor Shaktikanta Das said while voting for status quo in interest rates, as per minutes of the October policy meeting released on Friday.

The central bank has been mandated by the government to ensure the Consumer Price Index (CPI) based inflation is at 4%, with a 2% band on either side. The retail inflation has started to move down after being above 6% in May and June. In September, the inflation was ruling at 4.35%.

The minutes of the meeting held from October 6 to 8, quoted Das as saying in the August meeting, the panel was faced with the challenges posed by headline inflation exceeding the upper tolerance threshold for the second successive month.

The actual inflation outcomes for July-August, with inflation registering a substantial moderation to move within the tolerance band, have vindicated the MPC’s outlook and monetary policy stance, he noted.

The more-than-expected softening of inflation in July and August this year was underpinned by the significant lowering in food price momentum, especially in August.

Moderate inflation

Going forward, the governor said if there are no spells of unseasonal rains, food inflation is likely to register significant moderation in the immediate term, aided by record kharif production, more than adequate food stocks, supply-side measures and favourable base effects.

All members of the MPC — Shashanka Bhide, Ashima Goyal, Jayanth R Varma, Mridul K Saggar, Michael Debabrata Patra and Shaktikanta Das — unanimously voted to keep the policy repo rate unchanged at 4 per cent. Also, all members, except Varma, voted to continue with the accommodative stance.