New Delhi: With commodities and vegetable prices touching new highs, the inflation has moved up as well.
Inflation based on the wholesale price index moved up to 3.42 per cent for the week compared with 3.23 per cent in the previous week.
The market though had estimated inflation at 3.22 per cent, after it touched a 5 year low last week.
Inflation, however, remains well within RBI's target of close to 5 per cent for this fiscal. The price index was at 5.43 per cent in the corresponding week a year ago.
"Inflation is likely to remain around 3.5 per cent till December despite concerns of excessive rainfall in some parts of the country affecting kharif production, and high crude oil prices," PTI quoted HDFC Bank chief economist Abheek Barua as saying.
He said although interest rates might remain same but there was a lurking fear of hike in cash reserve ratio by the Reserve Bank. The central bank is scheduled to announce its mid-term review of the monetary policy on October 30.
Credit off take in the past six months has declined by 2-3 per cent as compared to the same period last year, indicating slowdown in the demand, Punjab National Bank Chairman and Managing Director K C Chakrabarty had said recently.
Besides, the government yesterday raised Market Stabilisation Scheme ceiling by Rs 50,000 crore to Rs 2,00,000 crore, to absorb liquidity as the present limit of Rs 1,50,000 crore was about to be reached.
The government had increased the ceiling to Rs 1,50,000 crore in August from Rs 1,10,000 crore earlier.
(with agency inputs)
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