HIGH PRICES OF FOOD A WORRY, BUT WHOLE­SALE IN­FLA­TION FALLS

Hindustan Times ST (Mumbai) - HT Navi Mumbai Live - - FRONT PAGE - HT Correspondent let­ters@hin­dus­tan­times.com

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

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