Today's Paper

Inflation soars to 11.89 per cent

Sujay Mehdudia

NEW DELHI: Inflation continues to soar and touched 11.89 per cent in the week ended June 28, up from 11.63 per cent the previous week. Consumers are forced to pay higher prices for fruits and vegetables, pulses and edible oils.

To top it all, wholesale price-based inflation reached a new 13-year high, adding to the concerns of borrowers who fear that the Reserve Bank of India (RBI) may go in for another interest rate hike at its quarterly review on July 29. The RBI last month raised short term lending rate, Repo, twice by 0.25 and 0.50 per cent and the mandatory cash requirements for banks by 0.50 per cent, to squeeze money supply for taming inflation. Inflation in the corresponding week a year ago was 4.42 per cent.

The Finance Ministry said that inflation had increased only marginally and actually stabilised in the case of essential commodities.

Experts say double-digit inflation is here to stay for some time and a decline could be witnessed only after September.

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