Lower food prices eased India's March retail inflation to 4.28 per cent from 4.44 per cent in February 2018, as per official data released on Thursday.
However, on a year-on-year (YoY) basis, the consumer price index (CPI) last month stood higher than the 3.89 per cent reported in March 2017.
According to the data released by the Central Statistics Office (CSO), the consumer food price index (CFPI) stood at 2.81 per cent in March compared to 3.26 per cent in February 2018.
The RBI kept its repo, or short term lending rate for commercial banks, unchanged.
The RBI's Monetary Policy Committee (MPC) said the recent volatility in global crude prices has brought considerable uncertainty to the near-term inflation outlook.
"We continue to remain vigilant on how inflation unfolds, in the sense that we are data dependent," RBI Governor Urjit Patel said at a media briefing here following the MPC meeting.
He said that several uncertainties continue to surround "the baseline inflation path".
"The revised formula for MSP (minimum support price) -- as announced in the Union Budget 2018-19 for kharif crops -- may have an impact on inflation, although the exact magnitude will be known only in the coming months," he said.
"Besides, in case of further fiscal slippage from the Union Budget estimates for 2018-19 or the medium-term path, it could adversely impact the outlook on inflation. Another risk is from fiscal slippages by states on account of higher committed revenue expenditure.
"Also, companies polled by the RBI expect input and output prices to rise, going forward," he added.
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