NEW DELHI: India’s headline inflation in January accelerated to its fastest pace in more than a year, putting more pressure on the central bank to raise borrowing rates to check rising price pressures after it already raised banks’ reserve requirements in January.
But analysts say the central bank’s next move is expected only after the February 26 budget and could depend if the government starts to roll back its stimulus measures.
The wholesale price index rose 8.56 percent in January from a year earlier, its highest since November 2008 and accelerating from a 7.3 percent gain in December, data showed on Monday.
The rise was driven by a 17.4 percent jump in food prices, which rose on weak monsoon rains and flooding from last year.
Inflation in manufacturing picked up to 6.55 percent from about 5 percent in December, a sign that inflationary pressures were spreading to other sectors of the economy.
The Reserve Bank of India (RBI) is widely expected to raise borrowing rates at its April review after it surprised markets with a stronger-than-expected rise in banks’ cash reserve requirements in January.
Tags: economy, Inflation rises
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