Driven by higher prices of fruits and vegetable, cereals and some manufactured items such as iron and steel and edible oil, inflation grew to a new 13-year high of 11.63 per cent.
During the week ending June 21, inflation moved up by 0.21 per cent from 11.42 per cent in the previous week and 4.32 per cent in the corresponding week a year ago.
The wholesale price index-based inflation inched up on account of higher prices of unrefined oil that soared by eight per cent, tea by four per cent, fruits and vegetable, sea fish, maize and bajra by two per cent each.
At the same time, pulses, including urad and moong and spices became expensive by one per cent each.
Despite attempts made by the government to tame price rise, items like iron and steel, edible oils and cement became costlier during the week.
Galloping inflation may force RBI to further hike short term lending rate to banks as well as statutory deposit requirements when it reviews the credit policy on July 29.
To anchor inflation, the central bank is likely to increase repo rate by a further 25 basis points and CRR by another 50 basis points during the month, Crisil Principal Economist D K Joshi told PTI.
RBI has already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.
According to Goldman Sachs, the apex bank is expected to hike another 100 basis points through a combination of raising the repo rate, 50 basis points compared to the earlier expectation of 25 basis points and the CRR by 50 basis points over the next 3 months, with risks towards more tightening.