New Delhi: The 10-week downturn in inflation rate was cut by violent monsoon storms in the week ended 23 June, as prices of food and some manufactured items rose pushing the wholesale prices index higher to 4.13%.
Inflation, which was 4.03% in the previous week, is still below Reserve Bank’s tolerance level of 5% for the current fiscal.
RBI Governor Y V Reddy, in a speech in Moscow earlier this week reiterated, “The policy endeavour would be to contain inflation close to 5%... assuming no further escalation in international crude prices and barring domestic or external shocks.”
This is the fourth week in a row when inflation has remained below the 5% mark, making a case for RBI not to increase interest rates further.
HDFC Bank Chief Economist Abheek Barua said RBI’s stance would shift from hawkish to neutral in its upcoming monetary policy review, slated for 31 July. “All the major rates are likely to remain stable,” he added.
However, going forward rising crude oil prices may play spoilsport as it has already touched a 10-month high of $73.92 a barrel — up nearly 10% in the last one month.
Among food articles, prices of maize, fish-marine, linseed, dairy products, groundnut oil, fruits and vegetables and pulses became costlier as a heavy spell of monsoon rainfall lashed producing regions, although spices and condiments, poultry chicken, ragi and bajra became cheaper.
Elsewhere some minerals saw price increase as high as 25%. Mineral like Orchre, fire clay and iron ore registered price rise of more than 10%.
Inflation for the week ended April 28, was revised to 6.01% as compared to the provisional figure of 5.66%. This was done as WPI for the week stood at 211.6 points against the provisional figure of 210.9.
During the week ended June 23, manufactured items such as dairy products, groundnut oil and lead ingots became dearer. Prices of skimmed milk powder rose 5%, oil cakes by 2%, groundnut oil and rice bran oil by 1%. But prices of ginegelly oil and khandsari eased 1%.
Heavy rainfall in many parts of the country led to rise in prices of fruits and vegetable by 1% followed by fish and marine items. Maize was expensive by 2% and linseed was up 1% during the week.
However, prices of ragi declined by 3%, bajra 2% and condiment & spices, masur and poultry chicken fell by 1% each.
Among mineral group, prices of orchre jumped 25% followed by fire clay at 24%. Besides, iron ore prices were up 10% and phosphorite by 4%. Prices of flourites fell by 39%, magnesite by 36% and chromite prices went cheaper by 4%.
Despite rise in international crude oil prices, price index of Fuel, Power, Light & Lubricants segment remained unchanged at the previous level.
Elsewhere, cement and chewing tobaco prices went dearer by 1%, lead ingot by 4%, map litho paper by 2%.