India's wholesale inflation hits 4-month high on rising food prices
India's wholesale inflation rose to a four-month high of 2.4% in October, significantly up from last month's 1.84%. The surge was mainly driven by a sharp rise in food prices, with vegetable costs alone rising over 60% in the same period. The data also showed that tomato prices inflated by a staggering 161%, while potatoes, onions, and garlic saw inflation rates above 50%.
Consumer inflation breaches RBI's tolerance band
Earlier this week, consumer inflation also hit a 14-month high at 6.2%, breaching the Reserve Bank of India's tolerance threshold of 2-6%. This development has pretty much ruled out any interest rate cuts in the upcoming December meeting of the Monetary Policy Committee. Food inflation has also spiked, hitting a 15-month high on the back of skyrocketing vegetable prices. Inflation in the food basket hit 10.87% in October, up from 9.24% in September and much higher than last year's 6.61%.
RBI maintains policy rate, experts anticipate future easing
The RBI has kept its policy rate unchanged at 6.5% for the 10th time in a row in its October meeting. However, experts believe that there could be a possible rate cut in the February meeting. Upasana Bharadwaj, Chief Economist at Kotak Mahindra Bank, blamed the unexpectedly high CPI inflation mainly on skyrocketing vegetable prices and a sharp surge in core inflation.
