Inflation rose to 11.98 per cent for the week ended July 19 as some food and manufactured products turned dearer, justifying the harsh monetary stance of the Reserve Bank announced a couple of days back.
The moderation in inflation a week earlier to 11.89 per cent turned out to be an
aberration as the rate of price rise is now a just a tad below the crucial 12 per cent. It has been rising unabatedly after petrol prices were increased by the Government on June 5.
Prices of pulses, fruits and spices went up as did the rates some manufactured products items.
Inflation stood at 4.65 per cent in the corresponding week a year ago.
This is the first official data on inflation after the Reserve Bank increased the short-term lending (repo) rate by 50 basis points to 9 per cent and also raised the mandatory deposits (CRR) that banks have to park with it by 25 basis points to cool down the rate of price rise.
However, the exact effect of these measures will be known after some time only as official data is released with a two week lag and hike in CRR would come into effect only after August 30.
Announcing the first quarterly review of the credit policy RBI Governor Y V Reddy had said that the main thrust of the policy would be to bring down inflation to 7 per cent by March, 2009.
Earlier, the apex bank had set the attempt to bring down inflation close to 5 per cent by end of this fiscal and lower it further to 4-4.5 per cent with a medium-term objective of 3 per cent.