The RBI on Friday retained its retail inflation forecast for current fiscal year at 6.7 per cent amid geopolitical developments and higher global commodity prices, hoping inflationary pressures to ease further.

In its previous monetary policy review in June, it had projected retail inflation for 2022-23 at 6.7 per cent, up from 5.7 per cent forecast in April.

The RBI raised the benchmark lending repo rate by 50 basis points to 5.40 per cent.

RBI Governor Shaktikanta Das said inflation in second and third quarter of the ongoing fiscal year is expected to remain above the upper tolerance level of 6 per cent.

The central bank aims to keep retail inflation in a band of 2-6 per cent.