Inflation rose to 4.13% for the week ended June 23 from 4.03% in the previous week mainly due to rising prices of food articles and manufactured products.
The present inflation rate is still below the Reserve Bank of India?s (RBI) tolerance level of 5% for the current fiscal. The wholesale price based index stood at 4.84% in the corresponding week a year ago.
This is the fourth week in a row when inflation has remained below the 5% mark, making a case for RBI not to increase interest rates further. Analysts expected all the key interest rates to remain stable.
RBI governor Y V Reddy, in a speech in Moscow earlier this week said: ?the policy endeavor would be to contain inflation close to 5%…assuming no further escalation in international crude prices and barring domestic or external shocks.?
But, going forward, rising crude oil prices may play spoilsport as it has already touched a 10-month high of $73.92 per barrel?up nearly 10% in the last one month.
Prices of some food articles as a heavy spell of monsoon rainfall lashed producing regions. Fruits and vegetable prices rose by 1% while maize turned expensive by 2% and linseed by 1%.
However, prices of ragi declined by 3%, bajra by 2% and condiment & spices, masur and poultry chicken fell by 1% each. Prices of skimmed milk powder rose 5%, oil cakes by 2%, groundnut oil and rice bran oil by 1% while prices of ginegelly oil and khandsari eased 1%.
Among mineral group, prices of ochre jumped 25% followed by fire clay at 24%. Besides, iron ore prices were up 10% and phosphorite by 4%.
Prices of fluorites fell by 39%, magnesite by 36% and chromite prices went cheaper by 4%. Cement and chewing tobacco prices went dearer by 1% and lead ingot by 4%.