India’s retail inflation dropped to 5.66% in March from 6.44% in February, falling under the tolerance level of the Reserve Bank of India, the data from the Union Ministry of Statistics and Programme Implementation showed on Wednesday.

The central bank aims to keep inflation between 2% and 6%. In November, the price rise indication had settled within the RBI’s tolerance level for the first time in 2022. The price rise indicator was at 6.52% in January, 5.72% in December and 5.88% in November.

The country’s rural inflation in March stood at 5.51% as against 6.72% in February, while urban inflation was at 5.89% in March from 6.10% in February. The Consumer Food Price Index fell to 4.79% as compared to 5.95% in the previous month.

The ease in the retail inflation came after the Reserve Bank of India on April 6 decided to keep the repo rate unchanged at 6.50%. The repo rate is the interest rate at which the central bank lends money to commercial banks.

Central banks typically increase key lending rates at times of high inflation in economies. Higher key lending rates translate into high interest on loans disbursed by commercial banks. This, in turn, keeps a check on discretionary spending by consumers which is expected to help them with price rises due to high inflation.

The central bank’s decision to maintain status quo on the repo rate came after six consecutive hikes which saw the lending rates go up by 250 basis points, or 2.50%, since May last year.