Inflation came down slightly to 5.68 percent in March riding on a decline in food prices, according to the Bangladesh Bureau of Statistics (BBS).

Planning Minister AHM Mustafa Kamal released the inflation data for January to March yesterday.

In February, the inflation rate stood at 5.72 percent.

Food inflation declined in the third quarter of the current fiscal year of 2017-18 on the back of a fall in prices of egg, vegetables, and spices.

March's inflation figure, however, was higher than the same month a year ago when it was 5.39 percent.

Inflation rose to 5.76 percent in January-March, up from 5.28 percent in the second quarter.

According to the Consumer Price Index (CPI) of the BBS, rural inflation was 5.72 percent in January-March, up from 5.08 percent a quarter ago. It also rose in urban areas: it increased to 5.83 percent in the third quarter from 5.65 percent in the second quarter.

Prices of clothes, fuel, furniture and home appliances, medical services, transport and educational items and house rent rose in January-March, according to a statement of the BBS. Zahid Hussain, the lead economist of the World Bank's Dhaka office, said the expansionary monetary policy of the Bangladesh Bank is likely to heighten inflationary risk.

He said although the BBS data are showing a declining trend of inflation, the food inflation is experiencing a rising trend in reality. The price of rice is still high, he said.

Price of rice is a key determinant of overall inflation as it accounts for 23 percent of the commodity basket in the consumer price index. Coarse rice sold forTk 42 to Tk 46 per kg in Dhaka yesterday, down 3.30 percent from a month ago but up 14 percent from a year ago, according to the Trading Corporation of Bangladesh.

Hussain said the appreciation of the US dollar against the taka is likely to stoke inflationary pressure in the next quarter. He said inflation would stand at 6 percent in the next three months if there are no natural disasters.

Finance Minister AMA Muhith has set an inflation target of 5.5 percent for the current fiscal year.