Inflation jumps to 6.73 per cent
Inflation rises to a more than two-year high, dealing a new blow to Govt and central bank efforts to stabilise prices.business Updated: Feb 15, 2007 17:23 IST
Wholesale inflation jumped to a more than two-year high of 6.73 per cent, the government said on Thursday, dealing a new blow to government and central bank efforts to stabilise prices.
On Tuesday, RBI tightened monetary policy for a second time in two weeks to fight accelerating inflation, hiking the amount of cash commercial banks must keep on deposit to 6.0 per cent from 5.5 per cent.
At the end of January, the central bank raised its key short-term borrowing rate by a quarter percentage point to 7.5 per cent.
The news however barely affected the benchmark Bombay Stock Exchange which was up 255.02 points or 1.89 per cent to 14,274.92 in afternoon trade after recent sustained losses.
Last week, alarm bells rang after the government said inflation as measured by wholesale prices hit a surprise two-year peak of 6.58 per cent as of January 27. The latest data is to February 3.
Last week's rise prompted Finance Minister P Chidambaram to declare that the government was "determined to take all steps to moderate inflation. We have done it before and we are confident of doing it again.