The battle to control prices continues for the Reserve Bank of India with the expensive food and manufactured items pushing Wholesale Price Index-based inflation to a 13-month high of 9.78 per cent in August against 9.22 per cent in July, indicating that the recent spate of interest rate hikes since March, 2010, has not helped curb the rising prices.
With the growth rate likely to take a dip in the coming days, the RBI is scheduled to review the interest rate policy again on Friday even as it faces a dilemma of sorts as the economy is confronted with high inflation and sliding growth.
The RBI has raised the interest rates 11 times in the last 18 months. The near double-digit inflation in August is highest since July, 2010, when it was 9.98 per cent.
“The inflation is perilously close to double digit. The RBI is also watching the situation like the government, and collectively it would be possible for us to tackle the problem,'' Finance Minister Pranab Mukherjee said in reaction to the new inflationary figures.