If things pan out as the Reserve Bank of India has projected, the era of 50-basis-point rate hikes is over, Deputy Governor Michael Patra says. Still, the central bank cannot take the foot off the brake because inflation is likely to average 5%-5.4% in FY24.

"We must guide inflation to a stage where it is stable at those levels," Patra says. "We must then guide inflation to 4%, until which point we have to stay on our toes."

The Reserve Bank of India must shepherd inflation to bring about a durable decline, Deputy Governor Michael Patra says.

"The battle against inflation is far from over," Patra says. We remain on guard, far from neutral until we see durable decline in inflation."

What's crucial to note is that the RBI has reduced the size of the repo rate hike, which unfortunately has been priced in, the deputy governor says.

"The moderation of inflation will be very grudging, very uneven," he says. "We must shepherd inflation -- first firmly into the tolerance band (2%-6%) and then to the target."

The consideration for formulation of monetary policy is growth and inflation, RBI Governor Shaktikanta Das says when asked whether the central bank adjusts its policy with an eye on foreign exchange rates.

The policy stance is not for exchange-rate management but aimed at preventing volatility in the currency market and attract capital flows. There are measures outside of monetary policy to attract capital flows.

The Reserve Bank of India does not determine policy rates based on actions taken by the US Federal Reserve, Governor Shaktikanta Das says.

The terminal Fed rate is important for the whole world, including India, he says, but RBI’s policy rates are primarily driven by domestic factors.

The worst of inflation is behind us, RBI Governor Shaktikanta Das says at the post-monetary policy conference, underscoring the six key highlights of his policy statement earlier today.

The six key highlights are:

• India’s GDP Growth is resilient. It is holding on and doing well in a world of slowing growth.

• Headline inflation is moderating... The worst of inflation is behind us. Globally, the same trend is visible.

• While inflation is moderating, there is no room for complacency. We have to be watchful, nimble in our actions should it become necessary. The battle on inflation is not over.

• We are ready to undertake liquidity operations to inject liquidity but will look for durable signs of turn in liquidity cycle.

• Story of Indian rupee is one of resilience and stability. We remain committed to act in event of excessive volatility in currency market.

• India's current account deficit is eminently management. Let there be no doubt about it.