MUMBAI: The Reserve Bank on Friday significantly lowered the inflation projection for the current fiscal to 2 per cent from 2.6 per cent estimated earlier as the economy continues to witness rapid disinflation.

For the first time since the adoption of Flexible Inflation Targeting (FIT) in 2016, average headline inflation for a quarter at 1.7 per cent in Q2 of 2025-26, breached the lower tolerance threshold (2 per cent) of the inflation target (4 per cent).

It dipped further to a mere 0.3 per cent in October 2025, an all-time low.

"The faster than anticipated decline in inflation was led by correction in food prices, contrary to the usual trend witnessed during the months of September-October. Core inflation (CPI headline excluding food and fuel) remained largely contained in September-

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