India’s Wholesale Price Index-based inflation rose to a nine-month high of 0.73% in December, according to government data released on Monday.
The wholesale inflation was in the negative range for six months from April to October, before turning positive in November at 0.26%.
The positive rate of inflation in December was primarily due to an “increase in prices of food articles, machinery and equipment, other manufacturing, other transport equipment and computer, electronics and optical products”, the Ministry of Commerce and Industry said in a press release.
It stated that the index in the food inflation category rose to 5.39% in December from 4.69% in November, followed by a decline of 0.71% in the index for fuel and 0.21% fall in the manufactured products category.
Due to this, the all-commodity index of the Wholesale Price Index was down 0.85% month-on-month, while the food index was 1.75% lower from November.
Data released on January 12 had showed that India’s retail inflation increased to 5.69% in December, the highest in four months. The price rise indicator stood at 5.5% in November, 4.87% in October and 5.02% in September.
The Reserve Bank of India’s Monetary Policy Committee had on December 8 decided to keep the repo rate unchanged at 6.50% for the fifth consecutive time. The repo rate is the interest rate at which the central bank lends money to commercial banks.
Central banks typically increase key lending rates at times of high inflation in economies. Higher key lending rates translate into high interest on loans disbursed by commercial banks. This, in turn, keeps a check on discretionary spending by consumers.
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