Reserve Bank of India governor Shaktikanta Das has said that despite some moderation, inflation continues to remain “unacceptable and uncomfortably high” amid a considerable slowdown of the global economy, according to the minutes of the August Monetary Policy Committee (MPC) meet.

The governor has also pointed out there are early indications that inflation might have peaked in April, but significant uncertainties still remain on account of adverse spillovers coming from simmering geopolitical tensions, volatile global commodity prices and financial markets.

“Sustained high inflation, unless addressed effectively, could result in unanchoring of inflation expectations and their second-order effects. This necessitates appropriate monetary policy response to prevent upward drift in inflation from the target rate,” the RBI governor said while voting for a 50 basis point repo rate hike during the last policy review meet.

The governor said that the decision to increase the rate is tailored toward bringing retail inflation within the target band and then taking it close to the target of 4 per cent over the medium term.