Though easing a tad from 11.40 per cent in the last week of July, food inflation remained in double digits at 10.35 per cent for the week ended August 7, mainly because the fall in the prices of vegetables such as potatoes and onions was largely offset by the rise in prices of cereals.
As per the WPI (wholesale price index) data released here on Thursday, the 1.05 percentage point decline in the price spiral can also be attributed to the high base effect as food inflation during the like week a year ago was at 14.18 per cent. However, despite the downtrend, the Reserve Bank of India (RBI) is expected to continue with its tight money policy stance as the prime objective is to bring down the headline WPI inflation to tolerable levels as it remained way above at 9.97 per cent in July. The apex bank is scheduled to unveil its first mid-quarterly review on September 16.
