India's central bank will continue to focus on targeting inflation and cannot drop guard, Reserve Bank of India Governor Raghuram Rajan said in an interview to CNBC-TV18 on Thursday.
"This is where we cannot relax our guard quickly, we cannot say we are out of the inflation woods," Rajan said, referring to the central bank's achievement over bringing down retail inflation sharply from double digit level.
"This is the time we have to consolidate and ensure that the disinflationary perception is entrenched."
India's consumer prices index fell to 5.37 per cent in February from a high of 11.16 per cent in November 2013, a few months after Rajan assumed office.
Appreciating the government's efforts on fiscal consolidation over medium term, Rajan said the government was collaborating on the central bank's inflation target.
The RBI targets inflation at 6 per cent by January 2016 and 4 per cent for 2017/18.
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