New Delhi: The inflation rate crossed the six per cent mark in the first week of the new fiscal mainly due to a sudden 23 per cent surge in vegetable prices, increasing pressure on RBI to tighten money supply next week.
Wholesale prices-based inflation rose to 6.09 per cent for the week ended April 7 from 5.74 per cent for the week ended March 31.
The rate has stayed above six per cent, higher than Reserve Bank's tolerance level, for the past two months.
The rise in inflation would mount pressure on RBI to either increase interest rates or take some other step for moderating money supply in its annual monetary policy on April 24, analysts said.
"I think RBI will again take measures to tighten liquidity. But it is difficult to predict which instruments they are going to touch. It may be another rate hike or some sort of tightening on External Commercial Borrowing," PTI quoted Crisil principal economist D K Joshi as saying.
But Finance Minister P Chidambaram expected inflation would again come down to around 5.7 per cent next week.
"To contain inflation remains a very high priority... and my expectation is it will hover around 5.7 per cent next week," PTI quoted Chidambaram as saying.
Controlling inflation will indeed be a priority for the UPA Government, particularly since assembly elections in Uttar Pradesh are going on. Price rise was blamed for the Congress' loss in assembly polls in Punjab and Uttarakhand.
Besides vegetables, indices, which reflect price changes, of all broad categories rose, be it primary articles, power, fuel, non-primary articles, light and manufactured products.
Comments
0 comment