The Reserve Bank of India governor Urjit Patel on Saturday defended maintaining tight monetary policy even when retail inflation remained low.

Addressing reporters along with finance minister Arun Jaitley by his side after a customary post-Budget meeting, Patel said the central bank’s monetary policy remains forward looking rather than “looking at inflation rates of today or yesterday.”

“We explained our reasons for decisions that we take and given the monetary policy framework and inflation targeting system that has been followed on account of legislative change. I think that our decisions have been forward looking rather than backward looking,” he said when asked whether RBI has missed the bus to cut interest rates when retail inflation ran low.

RBI on Wednesday kept interest rates unchanged and warned that inflation risks were skewing upwards. The central bank raised its March quarter Consumer Price Index (CPI) inflation forecast to 5.1% and projected an inflation range of 5.1-5.6% in the first half of the next fiscal year.

Jaitley defended the monetary policy committee’s decision hailing it to be a balanced one.

On fiscal situation, Jaitley said he sees next fiscal to be reasonably more comfortable as far as revenues are concerned.

“Therefore, I can’t at this stage say there would be any slippage. I am sure we will be able to maintain the target quite well,” he added

Patel said one needs to be prepared for movement in oil prices on either ways because it very difficult to predict.

“A few months ago, in June or so, people were talking about oil prices never going above $45 and some of the advise had come to MPC was based on that,” he said.

On the volatility in the equity market, Patel said the correction in India and globally globally underscores how capital markets can change direction.

“So far neither globally nor in India have we felt that this bubble could lead to a very major problem. However, as financial market regulators both RBI and SEBI need to be cognisant of the risk going forward. But the correction in the last few days underscores that these things can move pretty quickly” he added.