HIGH PRICES OF FOOD A WORRY, BUT WHOLESALE INFLATION FALLS
Wholesale inflation declined for the 14th straight month as it fell 0.73% in December but a sharp rise in food prices remained a major worry for families fretting over rising household budgets despite plunging inflation figures.
Wholesale food inflation, a marker for price movements in bulk food purchases for traders, shot up to 8.17% in December from 5.20% in the previous month, data released on Thursday showed.
The overall wholesale inflation was (-)1.99% in November.
This mirrors similar trends in shop-end prices as well. Data released on Tuesday showed the retail inflation rate rose to a 15-month high of 5.61% in December driven by costlier food items, particularly pulses.
Rising inflation has also weakened chances of another round of interest rate cuts by the Reserve Bank of India (RBI) next month.
The latest price data came on a day when the rupee fell to 67.29 to a dollar, the lowest since September 2013. A weak rupee will make most imported goods such as mobile phones and electronic gadgets costlier besides making overseas travel expensive.
A weaker local currency will also partially offset gains from the slump in crude oil prices by keeping the import bill high in rupee terms. Crude oil prices are currently hovering around $30 a barrel, the lowest in 12 years.
CONTINUED ON P12