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India's retail inflation is likely to breach the mandated inflation target band of 2-6% for three straight quarters but is showing indications of peaking, the Reserve Bank of India (RBI) deputy governor Michael Patra said on Friday.

Retail inflation eased marginally in May, after touching an eight-year high of 7.79% in April, but remained above the central bank's tolerance band of 2-6% for a fifth month in a row. In a span of just two months, RBI revised the real GDP growth forecast down from 7.8% to 7.2%.

In order to tame the inflationary pressure, the RBI in its latest monetary policy committee review earlier this month decided to hike the policy repo rate by 50 basis points to 4.9%.

"The RBI Act mandates that in case the inflation target is not met for three consecutive quarters, which is the likely scenario, the RBI shall set out a report to the central government and in that report it will state the reasons for failure to achieve the inflation target," Patra said.

Patra, who was speaking at an event organised by the PHD Chamber of Commerce and Industry on Friday said that the core measures of inflation were showing signs of second-round effects which warranted monetary action. The RBI is hopeful that any further monetary policy steps will be more moderate compared to the global tightening.

The ongoing geopolitical developments in Ukraine have challenged India's economic prospects, thereby darkening the country's outlook and making it highly uncertain, said Patra.

High inflation has hurt the rupee and pushed it to record lows while bond yields have been rising on expectations of aggressive monetary policy tightening and a record government borrowing programme. The deputy governor said the RBI will defend the rupee from extreme volatility and not allow any "jerky or disorderly movements".

While describing the current level of bond yields "uncomfortably high", Patra said the RBI would take necessary measures to ensure yields move in an orderly fashion and the government's borrowing requirement is smoothly completed.

RBI is on course to bring down prices but the retail inflation rate is likely to remain above the top end of its mandated target band until December, Governor Shaktikanta Das said in an article in the Times of India on Friday. "We are well on track to bring down inflation and inflation expectations. Until December, CPI is expected to remain higher than the upper tolerance level. Thereafter, it is expected to go below 6% as per our current projections," Das said.

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