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Inflation rises to 5.79% in July

Inflation rises to 5.79% in July

New Delhi: Inflation based on the Wholesale Price Index (WPI) rose to 5.79 percent in July compared to 4.86 percent in June due to rising food prices and costlier imports on account of continuous depreciation in rupee against the US dollar.

During the corresponding month of the previous year WPI inflation was at 7.52 percent.

Headline inflation in the food articles category climbed for the third consecutive month to double digits at 11.91 percent as against 9.74 percent in June.

Onion prices went up by 145 percent during the month on an annual basis.

Reacting to the WPI number for July, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that the inflation will remain in range of 5 to 6 percent by March 2014.

Data released on Monday, however, showed retail inflation eased to 9.64 percent in July from 9.87 percent in the preceding month as prices of cereal, pulses, fruits and sugar softened.

RBI keeps a close watch on the inflation data to decide its monetary policy.

However, in its first quarter monetary policy in the previous month, RBI had kept its key policy rates unchanged to stablise the rupee and contain the escalating current account deficit.

Besides, the industry for long has been demanding for a cut in the key policy rate by the RBI to thrust investment and spur economic activities.

Build up inflation rate in the financial year so far was 3.12 percent compared to 2.98 percent in the corresponding period of the previous year.

A global sell-off has made the Indian rupee the worst-performing emerging Asian currency so far in 2013.

It hit an all-time low of 61.80 per dollar last week and is down almost 10 percent against the dollar so far this year.

India is also one of the largest importers of crude oil and a pick up in prices through last month coupled with the weak currency added to wholesale prices, which just a few months ago had fallen to below 5 percent.

 

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