New Delhi: The inflation numbers for the week ending November 3 are in and they are above market expectations.
The wholesale price index for the week surged ahead of 3 per cent at 3.11 per cent as against to 2.97 per cent in the previous week. The market was estimating it to be stable at 2.97 per cent. The rise in the prices of food items and petroleum products led to this upsurge.
Prices of aviation turbine fuel flared by five per cent while that of furnace oil shot up by six per cent. This was the eighth increase in
ATF prices this year, following the rise in global crude prices.
However, inflation is still way down from RBI's projection of close to 5 per cent for the current fiscal. In the previous week, inflation stood at 2.97 per cent. It was 5.45 per cent in the corresponding week last year.
The inflation data pertains to a period immediately after the Reserve Bank further tightened money supply in its mid-term policy review. However, the exact effect of the RBI move to ask banks to keep 0.5 per cent more cash with the Central bank will be known later as it comes into effect during a fortnight from November 10.
Analysts said any interest rate cut by RBI may not happen in the immediate future to spur demand despite low inflation because inflationary expectations are very high due to rising international crude and food prices.
The government is yet to decide whether to increase prices of other petroleum products or compensate oil marketing companies through duty cuts or bonds. In case, oil prices are hiked inflation will further head northward.
Even after falling by 26 cents, crude oil prices were ruling above $94 a barrel on Friday. Among other categories, food prices showed a mixed trend, while most manufactured items turned dearer during the week.
(With PTI inputs)
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