RBI says focused on bringing inflation down to 4pc

The Reserve Bank of India said on Monday its focus remains on bringing down consumer inflation to 4 percent, while managing cash conditions and cleaning up the banking sector of soured assets would be its other priorities.

"The short-term macroeconomic priorities of the Reserve Bank continue to be to focus on bringing down inflation towards the government-set target of 4 percent," central bank Governor Raghuram Rajan wrote in the foreword to its annual report published on Monday.

Rajan also warned that "room to cut policy rates can emerge only if inflation is projected to fall further," after consumer prices rose 6.07 percent in July, although the report noted the fall in prices outside of food and fuel were "a heartening development." The annual report provides details on the RBI's thinking across a slew of topics. It will be the last one published under Rajan, who will be replaced by Deputy Governor Urjit Patel next month.