Mumbai, Feb. 6 -- The Reserve Bank of India (RBI) on Friday projected retail inflation for the current fiscal year (2025-26) at 2.1 per cent, even as it flagged potential "upside risks" from geopolitical tensions and volatile energy prices.

Delivering the Monetary Policy Statement, RBI Governor Sanjay Malhotra noted that while headline CPI inflation remained low through November and December, it witnessed a slight hardening.

The central bank expects a shift in the inflation trajectory during the final quarter of the current fiscal. While the annual average is pegged at 2.1 per cent, the projection for Q4 (January-March 2026) stands at 3.2 per cent.

Governor Malhotra explained that this rise is largely technical rather than a surge in c...