Retail inflation dipped marginally to 6.44 per cent in February, mainly on account of a slight easing in prices of food and fuel items, as per government data released on Monday.
The inflation rate based on the Consumer Price Index (CPI) stood at 6.52 per cent in January and 6.07 per cent in February 2022.
The inflation rate for the food basket was 5.95 per cent in February, lower than 6 per cent in January.
Except for November and December 2022, retail inflation has remained above the RBI’s upper tolerance level of 6 per cent since January 2022. The Reserve Bank has projected retail inflation at 6.5 per cent for 2022-23, with the January-December quarter at 5.7 per cent.
The central bank has been mandated by the government to ensure the retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
To contain the rising prices, the RBI has hiked interest rates by 250 basis points since May last year. The latest rate hike of 25 basis points in February took the benchmark policy rate to 6.50 per cent.
Retail inflation in February remained above the central bank’s upper tolerance limit of six per cent for the second straight month, despite declining marginally from the previous month’s level, prompting analysts to predict another rate hike by 25 basis points by the Monetary Policy Committee (MPC) in its April meeting.
