Inflation rises to 11.89%

NEW DELHI: Inflation soared to 11.89 per cent for the week ended June 28, adding to the woes of the consumers who are paying higher prices for fruits and vegetable, pulses and edible oils.
    
On top of it, the Wholesale prices-based inflation reaching a new 13-year high, has added to the concerns of borrowers who fear that the Reserve Bank may go in for another hike in interest rates at its quarterly review on July 29.
    
The inflation was at 4.42 per cent in the corresponding week a year-ago.
    
Inflation rose on account of rising prices of coconut oil that soared by 11 per cent, mustard oil by five per cent, soya oil by four per cent, while fruits and vegetable, pulses, jowar and barley increased by one per cent each.
    
Despite attempts made by the government to tame price rise, items like cement increased by over one per cent and edible oils by two per cent.
    
However, the Finance Ministry said, "prices of essential commodities which include foodgrains, pulses, edible oils, vegetables, dairy products and some other commodities like kerosene, soap, safety matches more or less stabilised."
    
ICRIER, Director Rajiv Kumar said that inflation control is the prime focus of the government and monetary authority. "RBI may increase the rates in its forthcoming review to bring down inflation," he said.
    
According to the Crisil Principal Economist D K Joshi, 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 on July 29.
    
RBI had last month raised short term lending rate, Repo, twice, by 0.25 per cent and 0.50 per cent, and mandatory cash requirements for banks by 0.50 per cent, to squeeze money supply for taming inflation.