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 though it remained above the Reserve Bank's comfort level of 6 per cent for the second month in a row.
As per the government data released on Monday, the Consumer Price Index (CPI)-based inflation was at 6.52 per cent in January and 6.07 per cent in February 2022.
The retail inflation rate for the food basket worked out to be 5.95 per cent in February, marginally lower than 6 per cent in January.
It was 5.85 per cent in February last year.
As per the data, vegetable prices dipped by 11.61 per cent on an annual basis, though it recorded a double-digit increase in spices (20.20 per cent) and cereals and products (16.73 per cent).
A decline in inflation was also witnessed in the oils and fats segment.
The price rise remained subdued in segments like meat and fish, eggs, pulses and products, sugar and confectionery and non-alcoholic beverages.
On the other hand, the inflation in the fuel and light segment worked out to be 9.90 per cent in February.
Also milk and products, clothing and footwear became dearer during the month.
The data also revealed that inflation in rural areas was higher at 6.72 per cent during the month compared to 6.10 per cent in urban centres.
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 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.
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.
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.
Commenting on the data, Icra chief economist Aditi Nayar, said that given two consecutive CPI inflation prints above 6 per cent, the RBI's Monetary Policy Committee (MPC) may go in for another rate hike, although the decision is likely to be non-unanimous based on the minutes of the last review.
"Moreover, global developments over the next three weeks could impact the MPC's decision," she added.
The Reserve Bank is scheduled to announce the next bi-monthly monetary policy, the first for fiscal 2023-24, on April 6.
