The war on inflation appears to be in its last leg.

Consumer price inflation for April has fallen below 5% to an eighteen-month low of 4.7%, data released last week showed.

The wholesale price inflation, released this week, printed at a negative 0.9% for April.

The hope is that the deflation in wholesale goods prices will now feed into the RBI-tracked consumer prices, helping the central bank to plan cuts in interest rates this year.

Minutes after the release of the CPI inflation, RBI Governor Shaktikanta Das said he could say with a good amount of confidence that monetary policy is on the right track.

So, what is likely on Jun 8, when the RBI's Monetary Policy Committee announces its decision on interest rates? Will Das, happy with the progress made, signal lower borrowing costs?

A big challenge Das and the rest of the MPC will deal with is how El Nino will affect the inflation outlook. The MPC will look to buy more time to study monsoon data and sowing patterns to get a better hang of how inflation will play out.

It has been apparent that input costs have been easing for manufacturers, but they have yet to be passing on the benefit of lower costs to consumers to protect their margins.

The so-called pricing power still exists for manufacturers, which indicates a demand pressure on prices. This is an aspect solely resting within the ambit of the monetary policy.

Economic growth trends have been mixed, which, too, could force the RBI to wait a while for dropping cues on interest rates.

While the industrial output slowed to a shocking pace of 1.1% in March, down from 5.8% in February, high-frequency data like GST collections and manufacturing and services PMI point to robust growth.

India's manufacturing PMI hit a 4-month high of 57.2 in April, and services PMI hit a 13-year high of 62 during the month, while GST collections rose to a record ₹1.87 trillion.

It is too early for the hawkish RBI to change its feathers to resemble a dove.

The RBI expects the disinflation process to be uneven, and it may want to keep the option of adopting a restrictive stance if needed.

The RBI will likely hold the repo rate at 6.5% as it did in April. But it could change the stance. It will find new phrases to suggest its policy will be a hawkish pause instead of opting for a more straightforward, neutral stance.