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Monday, Dec 09, 2019

Inflation inches up to 11.91 per cent

Inflation rose mainly due to higher food and petroleum products prices and may prompt RBI to further tighten money supply in its quarterly review.

business Updated: Jul 17, 2008 21:09 IST


Inflation inched up to 11.91 per cent mainly due to higher prices of some food items and various petroleum products which may prompt RBI to further tighten money supply in its quarterly review slated for July 29.

During the week ending July 5, inflation moved up marginally by 0.02 per cent from 11.89 per cent in the previous week and 4.61 per cent in the corresponding week a year-ago.

The wholesale price index-based inflation rose moderately on account of higher prices of fruits, tea, maize, masoor, moong, coconut and imported edible oils.

Despite attempts made by the government to tame price rise, iron and steel and unregulated petroleum products like furnace oil, ATF, bitumen, light diesel oil and naptha too became expensive during the week.

However, the prices of cement remained stable, while vegetables and salt became cheaper during the week.

Rising inflation may force RBI to further hike short term interest rates as well as statutory deposit requirements when it reviews the credit policy later this month.

RBI had already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.

Finance Minister P Chidambaram on Thursday said that there is pressure on prices, though the steps taken by the RBI in the recent past have resulted in moderation of money supply.

The tightening of money supply, he added, can be seen from escalating overnight interbank call money rates, which have gone up to 7-9.1 per cent on Wednesday.

The government too in the recent past had taken host of fiscal measures, including export curbs on various food items and ban on futures trading on some agri commodities, to tame price rise.