Retail inflation rose to a three-month high of 4.81 per cent in June, mainly on account of the hardening prices of food, according to the government data.

Inflation based on the Consumer Price Index (CPI) stood at 4.31 per cent, revised upward from 4.25 per cent in May and 7 per cent in June 2022.

The inflation, however, remains within the RBI's comfort level of below 6 per cent.

The previous high CPI was in March at 5.66 per cent.

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The government has tasked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side. The central bank mainly factors in the CPI to arrive at its bi-monthly monetary policy decision. The next policy review is scheduled early next month.

Inflation for the food basket was at 4.49 per cent in June, higher than 2.96 per cent in May. The food basket accounts for nearly half of the CPI.

Last month, the Reserve Bank kept policy rates unchanged at 6.5 per cent and projected retail inflation for the current fiscal to average at 5.1 per cent, with June quarter inflation pegged at 4.6 per cent.