Concerned over the rising prices of food items, the Reserve Bank of India (RBI) governor D Subbarao said that expensive food items like cereals, onions and vegetables has continued to put pressure on overall inflation rate. Inflation related to primary food articles grew substantially to 8.25% in May as against 6.08% reported in April.
Further, the RBI chief expressed hope that good monsoon will cool price situation and assured that the central bank is making continuous efforts to break high food inflation. Reserve Bank of India (RBI) also maintained its status quo and left the key policy rates unchanged citing elevated food inflation. It also stated that rupee depreciation and uncertainty over foreign fund inflows may put upside pressures on overall inflation.
Inflation based on the Consumer Price Index (CPI) also called retail inflation came down further to 9.31% in May as against 9.39% in the previous month. While, wholesale price index (WPI) inflation came at 43-month low level of 4.70% in April as against 4.89% for the month of April. Further, the rising difference between the WPI and CPI inflation rates has also become a concern for the central bank.
