As compared to the same month last year, India’s wholesale price inflation dropped to a 3-month low of 2.04% in July, primarily because of a drop in vegetable prices, according to data provided by the Commerce Ministry on Wednesday.
In June, there was a 3.36 percent increase in the wholesale price index.
July saw a 3.55% increase in food costs, up from an 8.68% increase in June. After a dramatic surge of 38.76 percent in June due to the searing heat wave in the northern regions, vegetable prices decreased by as much as 8.93 percent in July.
As compared to the same month last year, India’s wholesale price inflation dropped to a 3-month low of 2.04% in July, primarily because of a drop in vegetable prices, according to data provided by the Commerce Ministry on Wednesday.
In June, there was a 3.36 percent increase in the wholesale price index.
July saw a 3.55% increase in food costs, up from an 8.68% increase in June. After a dramatic surge of 38.76 percent in June due to the searing heat wave in the northern regions, vegetable prices decreased by as much as 8.93 percent in July.
The RBI has fixed a mid-term target of 4 per cent for retail inflation before it goes in for a cut in interest rates to rev up growth. The RBI does not take into account WPI inflation in formulating its monetary policy. However, an easing in wholesale price inflation also leads to a decline in retail inflation.
The RBI kept the key policy repo rate unchanged at 6.5 per cent for a ninth consecutive meeting on Thursday as it continues to maintain a balance between accelerating economic growth and keeping inflation under control.
According to RBI Governor Shaktikanta Das, the Monetary Policy Committee voted by a 4:2 majority to maintain the current repo rate despite the fact that inflation has surpassed 5 percent and continues to be higher than the 4 percent target rate.
He claimed that because of “stubbornly” high food costs, inflation has increased to 5.1% in June after dropping to 4.8% in April and May.
Das clarified, “We have decided to continue with the disinflationary stance because growth cannot be sustained without price stability.”
The country’s inflation rate is anticipated to decline in the third quarter of the current fiscal year, according to the governor of the Reserve Bank of India.
