is fully in line with the ecb ’ s monetary policy strategy and practice. the first pillar of our strategy, which gives a prominent role to the analysis of monetary developments, is based on the empirical evidence of a close and stable relationship between money and prices in the euro area over the medium term. there is no evidence yet to suggest that this link has weakened over time. the ecb is fully aware that monetary developments may be subject to portfolio shifts in the short term, which are not directly related to future spending decisions. indeed, what matters is to identify and understand the underlying reasons for monetary developments in order to assess the implications for the risks to price stability over the medium term. in this respect, the analysis of monetary developments has provided useful guidance to the ecb ’ s monetary policy also over the past year. this leads me to another point mentioned in the draft resolution, namely the importance for a central bank to take account of asset prices when assessing risks to price stability, while not introducing moral hazard in financial markets through inappropriate reactions to excessive asset price developments. the ecb fully shares this view. it closely monitors asset price developments as indicators for monetary policy but it does not target them or react to them mechanically. as regards the proposed endorsement of macroeconomic projections by the governing council of the ecb, allow me to clarify once again the role of those projections in the process of monetary policymaking at the ecb. these projections play an important role for us, but they have by no means an all - encompassing role. they are an important technical input by ecb and national central bank staff in summarising and assessing the implications of a large body of information for future inflation in a consistent way. however, we are also fully aware of the difficulties of making projections. in particular, we recognise that it is impossible to summarise all the relevant information for assessing the maintenance of price stability in one single projection. given the difficulties of forecasting over the longer term and the uncertainty regarding the appropriate economic model, we do not advocate the use of a single projection to analyse the risks to price stability. we therefore explicitly look at many other indicators and analyses in the context of our two - pillar strategy, and we do not try to hide the complexity of monetary policy - making behind the production of a single governing council forecast. the projections reflect the expert judgement of eurosystem staff and we prefer to keep this distinct from the judgement of the governing council regarding the overall assessment of the risks to

february 2023. in all, we have raised the policy repo rate by 250 bps cumulatively between may 2022 and february 2023. thus, we acted in a timely manner and have calibrated the quantum of rate hike with the changing inflation outlook. in recent months, there are signs of some softening in inflation, with headline inflation easing to 4. 25 per cent in may 2023 from the peak of 7. 8 per cent in april 2022. 9. the cumulative impact of our monetary policy actions over the last one year is still unfolding and yet to materialise fully. while our inflation projection for the current financial year 2023 - 24 is lower at 5. 1 per cent, it would still be well above the target. as per our current assessment, the disinflation process is likely to be slow and protracted with convergence to the inflation target of 4 per cent being achieved over the medium - term. based on this realisation and with a view to assess the impact of past actions, we decided on a pause in the april and june 2023 meetings, but clarified unequivocally that this not a pivot – not a definitive change in policy direction. recognising that explicit guidance in a rate tightening cycle is inherently fraught with risks, the mpc has also eschewed from providing any future guidance on the timing and level of the terminal rate. growth concerns 10. in india, with the formal adoption of flexible inflation targeting ( fit ) in 2016, the reserve bank of india is entrusted with the responsibility of conducting monetary policy with the primary objective of “ maintaining price stability while keeping in mind the objective of growth ”. given our population 2 and large addition to the work force every year because of the “ demographic dividend ”, 3 we cannot be oblivious to growth concerns. hence, we prioritised growth during the pandemic years even as inflation remained above the target but within the tolerance band. 11. the indian economy displayed exemplary resilience post - pandemic and rebounded strongly from a contraction of 5. 8 per cent in 2020 - 21 to a growth of 9. 1 per cent in 2021 - 22 and 7. 2 per cent in 202223. proactive and coordinated response of fiscal and monetary policies nurtured a quick recovery, while various structural reforms related to banking, digitalisation, taxation, manufacturing and labour, implemented in the last few years, laid the foundation for strong and