New Delhi: Reversing the declining trend of three months, retail inflation inched up to 4.58 per cent in April and may prompt the RBI to harden stance at the monetary policy review next month.
The Wholesale Price Index-based inflation too rose to 3.18 per cent in April mainly on account of spike in fuel prices, as per inflation data released by the government.
The hardening of inflation, both retail and wholesale, comes weeks ahead of RBI’s Monetary Policy Committee (MPC) meet on June 4 and 5.
Retail inflation, based on movement in Consumer Price Index (CPI), rose after declining since January on account of rise in prices of cereals, meat, fish and fruits.
As per the Central Statistics Office (CSO) data, retail inflation was 4.28 per cent in March and 2.99 per cent in April last year.
A key data factored in by the RBI while deciding on the policy interest rate, retail inflation has consistently remained above the central bank’s comfort level of 4 per cent since November 2017.
In its first monetary policy review for the fiscal last month, RBI maintained status quo on interest rate citing inflationary concerns.
At the April 4-5 MPC meeting, deputy governor Viral Acharya had cited revival in investment activity and an improvement in capacity utilisation for his switch from a neutral stance to shift “decisively to vote for a beginning of withdrawal of accommodation in the next monetary policy meeting in June”.
A majority of the six-member panel had flagged upside risks to inflation as it kept the benchmark repurchase rate unchanged at 6 per cent.
