The Reserve Bank of India today said it is closely watching inflation situation and hoped that proper food management will help in easing of food prices.While talking to reporters on the sidelines of an SBI event in Mumbai, RBI Governor Raghuram Rajan said food prices may come down with appropriate food management by the government.The Wholesale Price Index (WPI)-based inflation rose to five-month high of 6.01% in May from 5.2% previous month, mainly driven by high food and fuel prices. He further added that both the government and the RBI are watching and have to be vigilant about food and fuel price rise.On the ongoing Iraq crisis, which has impacted global crude oil prices and also affected the rupee, Mr. Rajan said this is an area of concern. However, he said that since the oil resources are in the south of Iraq, it has not been directly affected by the fighting.He said that with narrowing of current account deficit and strong forex reserves, the country's external situation remains less worrisome.