Inflation has crossed all expectations with the figure rising to an unprecedented 11.05 percent for the week ended June 7, a 13 year high. This is expected to be on account of diesel and petrol price hikes announced in June 4.
The markets have taken huge beating after inflation numbers, which stood at 11.05% for the week ended June 7 as against 8.75% in earlier week. It is at 13-year high and the main reason was oil price hike, which happened at the end of last month.
Analysts say that we can see more action in the Repo and CRR rate. They say the RBI would come out with some measures on the rate and liquidity side much before the July policy.
The rate is now at the highest since May 6, 1995, when it was 11.11 percent.
The energy group index rose 7.8 percent in the week of June 7 when the government raised fuel prices.
Inflation for the week ended April 12 was revised upwards to 7.95 percent from 7.33 percent. The annual inflation rate was 4.28 percent during the corresponding week of the previous year.
The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.
This is a thirteen year high according to analysts. Many analysts had expected inflation to touch 10 percent soon after fuel price hike. Union Finance Minister P Chidambaram is expected to come out with the government’s view on the unexpected double digit inflation figure
The figures for inflation released last week did not take into account the recent hike in petrol and diesel prices which were effective only from June 4. Inspite of that inflation rose to a seven year high of 8.75% in the last week of May, as compared to 8.24% in the previous week. This is was the fastest rise in inflation since February 2001.
The latest inflation data led to a big fall in BSE sensex that dipped 339 points to previous close.
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