Powered by crude oil and food products, wholesale inflation at 9-year high

PTI

Tribune News Service

New Delhi, May 17

Wholesale price index-based (WPI) inflation rose to a record high of 15.08 per cent in April from 14.55 per cent in March due to rising prices of crude, food products and chemicals. WPI inflation has been in double digits for 13 straight months since April last year. Besides, the inflation rate for April is the highest in the current series which was introduced in 2013.

Fuelled by similar factors, retail inflation too was at a record 7.79 per cent in April from 6.95 per cent in March. It has remained above the Reserve Bank’s tolerance band of six per cent for four consecutive months.

In the WPI basket, the index for the fuel and power group was 2.8 per cent higher in April compared to March, the index for manufactured products (accounting for 64.23 per cent of the WPI basket) rose 1.7 per cent but more worryingly, the food index rose the fastest -- 3.4 per cent month-on-month.

“The high rate of inflation in April was primarily due to rise in prices of mineral oils, basic metals, crude petroleum and natural gas, food articles, non-food articles, food products and chemicals and  chemical products as compared to the corresponding month of the previous year,’’ said a Commerce Ministry statement.

Inflation in food articles was 8.35 per cent, as prices of vegetables, wheat, fruits and potato witnessed a sharp spike.  In the fuel and power basket, inflation was 38.66 per cent, while in manufactured products and oil seeds, it was 10.85 per cent and 16.10 per cent, respectively.  Inflation in crude petroleum and natural gas was 69.07 per cent in April.

Rupee box

The Indian rupee touched a record low of 77.73 versus the dollar due to gains made worldwide by the US currency as well as on fears of a slowdown in China. All eyes are now on market intervention by the RBI to shore up the rupee. The Indian rupee has depreciated nearly 6 per cent in the past one year, in the process hitting multiple lows.

“The weak economic data around the world, especially in China, has put pressure on the dollar index. Domestically, we are witnessing an outflow of funds due to a rise in interest rates in the US. We expect the currency to face pressure,’’ said Nish Bhatt of Millwood Kane International.

LIC IPO box

LIC shares debuted at a discount of 8.11 per cent at Rs 872 per share on the NSE on Tuesday. On the BSE, the shares got listed at Rs 867.20 apiece, down 8.62 per cent over the issue price of Rs 949 a share. LIC had fixed the issue price of its shares at Rs 949 apiece after the largest-ever IPO that netted Rs 20,557 crore for the government.