Latest figures have justified RBI's monetary policy.
Wholesale inflation soared to a 39-month high of 6.55% in February and retail inflation inched up to 3.65% due to rise in food and fuel prices, justifying the RBI's move to hold rates in last policy meet.
However, the prices of vegetables and pulses remained subdued during the month, giving some relief to consumers, showed the data released by the government today. The Wholesale Price Index (WPI) based inflation in January was at 5.25%, while the consumer inflation stood at 3.17%. The rising inflation is likely to refrain the Reserve Bank from cutting interest rates in its next monetary policy review on April 6.
According to the WPI data, food inflation witnessed a sharp 2.69% rise in February, while the fuel basket surged by 21.02%. Although the inflation rates of cereals, rice and fruits witnessed an increase, vegetables prices declined by 8.05% during February.The December WPI inflation rate was revised upwards to 3.68% from the previous 3.39%.
As regards the CPI, it rose to a 4-month high of 3.65% in February after touching a multi-year low of 3.17% in the previous month. Food inflation at the retail level was recorded at 2.01%, while that in fruits was higher at 8.33%, and fuel and light at 3.9% in February. The rate of price rise in meat and fish was 3.5%. Prices of sugar and confectionery items rose by 18.83% in February while inflation in milk and milk product increased by 4.22%.
The rate of inflation in household goods and services was 4.09%, while it stood at 4% in health segment. The transport and communication became expensive by 5.39%. ICRA Principal Economist Aditi Nayar said the likelihood of a repo rate cut by the RBI in April 2017 remains subdued, given its focus on bringing inflation to 4% in a durable manner.
"CPI inflation is expected to rise to above 4.5% in March 2017, as the base effect continues to unwind and prices of perishables track a seasonal uptrend," Nayar said. Industry chamber Assocham said the RBI need not get excessively worried about rising WPI and the easing of the interest rate cycle should continue, because the latest WPI inflation does not indicate any improvement in the pricing power of the manufacturers.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "inflation")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}