New Delhi: Inflation stayed unchanged at the previous week’s level of 6.09% during the week ended 14 April, above the RBI’s mandate of 5% for the current fiscal.
The high level of inflation could be gauged from the fact that it was just 3.7% during the corresponding week of the last fiscal.
Surprisingly, prices of vegetables which shot up over 23% during the previous week, contributing most to inflation, declined by 5% in the week under review.
This is the first inflation data released after the RBI came out with its annual monetary policy, in which it projected inflation to be 4-4.5% in the medium term. RBI governor Y V Reddy has said 5% inflation rate in 2007-08 was the “self-imposed mandate” for the bank.
RBI had projected inflation at 5-5.5 per cent for 2006-07, which was belied by figures in later part of the year though average inflation was within its tolerance level.
However, the figures for the week during which RBI released its credit policy would be known two weeks after because of the time lag.
If inflation continue to remain above 6%, RBI might have to take further monetary tightening measures, which it refrained from in its annual policy, analysts said.
Besides vegetables, prices of fruits, urad, coconut oil, naphtha, brass sheets and strips pulled down inflation. But this was offset by price rise in non-vegetarian food, gram, groundnut oil, cotton seed oil and ferro silicon. Prices of other products moved in a narrow range.