Retail inflation dipped marginally to 6.44% in February but stayed outside the Reserve Bank of India’s (RBI) upper band target of 6%, indicating that the central bank could go for a rate hike in its next monetary policy.

In the preceding month, the inflation rate based on the Consumer Price Index (CPI) was 6.52% while in the year-ago period it stood at 6.07%.

The February inflation rate was  mainly on account of a slight easing in prices of food and fuel items, as per government data released on Monday.

The retail inflation rate for rural areas stood at 6.7% compared to 6.1% in urban areas. Food Inflation eased to 5.95% for the month of February from 6% In January.

Except for November and December 2022, retail inflation has remained above the RBI's upper tolerance level of 6% since January 2022.

The Reserve Bank has projected retail inflation at 6.5% for 2022-23, with the January-December quarter at 5.7%.

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%.