Food inflation fell to its lowest in four months at 16.22% for the week ended March 13, as the pace of price rise for potatoes slowed and other vegetables such as onions became cheaper.
Inflation was 16.30% in the previous week. The fuel group inflation for week ended March 13 unchanged at 12.68%. On a week-on-week basis, the Wholesale Price Index for primary articles for week ended March 13 remained unchanged, up 0.1% from the previous week.
Meanwhile, hinting that it may hike key-rates further to control the high inflation, Reserve Bank on Thursday said the immediate challenge for the economy is to restore sustainable growth momentum and ensure price stability.
?The immediate challenge for the Indian economy and the financial sector is to reclaim the pre-crisis configuration with minimal efficiency loss…containing overall inflation have become imperative,? RBI deputy governor, Shyamala Gopinath told reporters here briefing the apex bank?s first financial stability report.
Gopinath reiterated that primary objective of the monetary policy continues to be ensuring price stability in the system but warned that inflationary pressures, which has already ?intensified beyond the RBI baseline projections? could escalate further.
During the week, petrol prices rose 16.82%, while diesel turned costlier by 14.99% year-on-year, as government restored customs on crude and raised excise duty on petrol and diesel. ?Food inflation is likely to soften in the coming months, but fuel and manufacturing inflation could pick up. I expect overall inflation to be around 11% in March,? HDFC Bank economist Jyotinder Kaur said.
The government expects food inflation to fall after the arrival of the Rabi crop (winter) in the markets next month.