Inflation unexpectedly has hit a seven-month high, this rise is mainly driven by higher food prices, increasing the odds for yet another interest rate hike by the central bank at its policy review later this month.The inflation, based on wholesale price index (WPI), was at 6.1 per cent in August and 5.85 per cent in the previous month.
But, what made it to rise so much is skyrocketing onion and vegetable prices..and amongst these also The sharpest increase was witnessed in case of onion prices which jumped by 323 per cent year on year in September.The price of vegetables in general rose by 89.37 per cent making life difficult for the common man.
As per data released by the government on Monday, the food inflation stood at 18.40 per cent in September over the same month last year. The food prices had shot up 18.18 per cent in the previous month.The government had hoped food prices will start falling on the back of a good monsoon this year, but cyclone Phailin, which left a trail of destruction along the eastern coast, could wreck a fertile rice-growing belt, where the main summer crop is at a ripening stage.
After the release of this data, there are high speculations in the market of a rate hike by RBI...Economists are split over whether Rajan will hike rates again at the next review on October 29. However, Monday's WPI data has increased the odds for more tightening at that meeting.
Read what is going on the industries which can effect your sales..
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