WPI Inflation at 7.81%; RBI may not relent

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WPI inflation for September 2012 has come in at 7.81% for the month of September 2012, as compared to 7.55% for the previous month and 10.00% during the corresponding month of the previous year. The sticky inflation number will give the RBI very little room to cut rates when it meets it meets for its Monetary Policy Review on Oct 30, 2012.

WPI Inflation at 7.81%; RBI may not relent
The August WPI inflation too has also been revised upwards to 7.56%.

Build up inflation in the financial year so far was 4.60% compared to a build up of 4.48% in the corresponding period of the previous year.

Fuel group inflation has surged following last month's hike in diesel prices and was placed at 11.88%, as against 8.32% (month-on-month).

The index for the manufactured group rose by 0.5 percent to 147.7 (provisional) from 146.9 (provisional) for the previous month

Today's inflation number is likely to tie the hand of the central bank when it meets to announce its monetary policy review on October 30, 2012. Analysts now expect that the RBI may not cut repo rates, given the high inflation number. The Industry and the government have been pushing for rate cuts from the RBI to help propel growth rates.

However, the high inflation numbers is likely to force the RBI to maintain a status-quo.


Read more about: inflation
Story first published: Monday, October 15, 2012, 11:55 [IST]
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