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India's FY23 retail inflation is projected at 4.5 per cent, said Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday.

Besides, inflation projection for 2021-22 is retained at 5.3 per cent, with Q4FY22 at 5.7 per cent on account of unfavourable base effects that are expected to ease subsequently.

In his policy statement post the Monetary Policy Committee's bi-monthly meeting, he said: "The CPI reading for January 2022 is expected to move closer to the upper tolerance band, largely due to adverse base effects.

"Taking all these factors into consideration and on the assumption of a normal monsoon, CPI inflation for 2022-23 is projected at 4.5 per cent with Q1:2022-23 at 4.9 per cent; Q2 at 5.0 per cent; Q3 at 4.0 per cent; and Q4 at 4.2 per cent, with risks broadly balanced."

On Thursday, the RBI retained its key short-term lending rates during the sixth and final monetary policy review of FY22.

Further, the growth-oriented accommodative stance was retained to give a push to economic activity.

In addition, the RBI's Monetary Policy Committee (MPC) maintained the repo rate, or short-term lending rate, for commercial banks, at 4 per cent.