Covid-19: RBI sees inflation falling below 4 pc target by mid-FY21

RBI governor Shaktikanta Das on Friday said the inflation is on a declining trajectory and could fall below the central bank's 4 per cent target by the second half of this fiscal amid challenges posed by Covid-19 pandemic.

He said the consumer price index based retail inflation has fallen by 170 bps from its January 2020 peak.

"In the period ahead, inflation could even recede further, barring of course any supply side disruptions and may even settle well below the target of 4 per cent by the second half of 2020-21," Reserve Bank Governor Das said in a early morning video conference.

Das added that such an outlook would make policy space available to address the intensification of risks to growth and financial stability brought about by Covid-19.

The retail inflation for March fell to a four-month low of 5.91 per cent on cheaper food articles.