Ganesh Kendale
NEW DELHI: Retail inflation surged to a 9-month high in Sept on the back of a sharp spike in food prices, particularly vegetables, edible oils and pulses, dashing hopes of any interest rate cut for now.
Data released by the National Statistics Office (NSO) on Monday showed the retail inflation, as measured by the consumer price index, rose an annual 5.5% in Sept, higher than the 3.7% in Aug and above the 5% recorded in Sept last year.
The food price index rose to 9.2% in Sept, up from 5.7% in Aug. Rural inflation was higher at 5.9%, while urban was at 5.1%. Separate data released by the commerce and industry ministry on Monday showed wholesale inflation, as measured by the wholesale price index, inched up to 1.8% in Sept from 1.3% in Aug, led by a surge in prices of food articles, vegetables. Food inflation surged to 11.5% from 3.1%. Potato inflation shot up to 78.1% during the month, while onion inflation was at 78.8%. Vegetable inflation during Sept was at 48.7%.
The retail inflation data showed vegetable inflation in Sept was nearly 36% – the highest level in 14 months, while edible oil moved out of deflation at 2.5%, while pulses and products was at 9.8%.
Earlier this month, RBI announced a change in the monetary policy stance from ‘withdrawal of accommodation’ to neutral, even as it kept the policy repo rate unchanged at 6.5% for the 10th successive time. The change in the central bank’s stance to neutral had triggered hopes of a rate cut later this year, but the Sept number may delay it for sometime as RBI may prefer to wait and watch.
RBI governor Das had cautioned that the CPI print for Sept was expected to see a big jump due to unfavourable base effect and pick-up in food price momentum.
