Inflation touches 4.92%
Inflation increased marginally to touch 4.92% for the week ended August 12, as compared to 4.82% for the earlier week.
By TNN |
NEW DELHI: Inflation increased marginally to touch 4.92% for the week ended August 12, as compared to 4.82% for the earlier week.
The rate was 3.67% for the corresponding week a year ago. The increase in inflation is attributed to rising prices of food and manufactured products.
Commenting on the rise in inflation, Finance Minister P Chidambaram said on Friday that the government was trying to keep the price line below 5% in the current fiscal. "Our tolerance for inflation has come down. We have to have inflation at tolerable levels," he said.
The minister said government had allowed import of wheat and pulses to keep prices of essential commodities under check. Ample liquidity is being provided to soften the impact of hardening global interest rates, he said.
"Hardening of global interest rates is not in our control. What we are doing is to ensure ample liquidity so that the impact of hardening interest rates is softened," he said.
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The wholesale price index data, released by the government on Friday shows a jump in prices of food and food products. The index for food articles group has risen by 0.5% including those of cereals, vegetables and spices. However the prices of eggs, fish and meat have gone down.Within manufactured goods as well, prices of essential items have risen 0.1% including those of sugar, khandsari, gur and edible oils.
While inflation is now close to RBI’s 5.0-5.5% target for the financial year to March 2007, analysts say that even though inflation was above the forecast because of excess rains, which could have cause descalation in some food prices, we are still looking at end-March inflation at 5.5%.
To curb the growth rate of inflation in the fast growing economy, the RBI has hiked its short-term rate by 150 basis points since October 2004. In July, the Reserve Bank of India lifted the reverse repo rate by 25 basis points to 6.0%, the highest level in four years.
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