Costlier cereals, fruits and food items pushed food inflation 11.47 per cent for the week ended August 28, fuelling fears of a rate hike by the Reserve Bank of India in its policy review on September 16.
Rising for the second consecutive week, food inflation jumped to 11.47 per cent from 10.86 per cent in the previous week, according to official data released here.
Experts said the rise in food prices was expected to prompt the RBI to tighten money supply in the system to rein in food inflation. In its mid-quarterly review, the RBI was expected to hike short-term lending rates as part of its measures to tighten the money supply, they added. Commenting on rising food prices, Planning Commission Deputy Chairman Montek Singh Ahluwalia said inflationary pressure would remain in the economy for some time now. “Inflationary pressures will not decline immediately, but will be down by December,'' he said.
