Stoked by rising prices of food items like fruits, vegetables and some manufactured products, the country’s  inflation shot up marginally to 4.45 per cent during the week ended July 28 — within RBI’s targeted limit, against 4.36 per cent previous week. The wholesale prices-based inflation was 4.72 per cent for the corresponding week of the previous year. This is the second official data on inflation after RBI raised the requirement for banks to park cash with the central bank, sucking out around Rs 16,000 crore.

No definitive trend
Inflation has increased despite RBI’s continued insistence that it has pushed up the CRR and interest rates to check it. The data did not represent any definitive trend as inflation had fallen during the previous week.
Possibly, the data next week would give some picture of the impact of RBI’s monetary review on inflation as there is around two-week lag between release of data and period of inflation.

The Reserve Bank of India may keep borrowing costs unchanged as inflation was below its 5 per cent target for the eighth week. 

WPI, on which inflation is based, rose by 0.1 per cent to 213.4 points during the week under review. Inflation figure was revised to 5.09 per cent for the week ended June 2 against the provisional figure of 4.80 per cent as wholesale price index finally stood at 212.5 points compared to earlier estimates of 211.9 points.