Inflation steady at 6.46%

For the third week in a row this month, the annual rate of wholesale price-based inflation remained unchanged.

Data for the week ending 17 March, 2007 show that the inflation rate was steady at 6.46 per cent, as compared with 3.69 per cent in the corresponding week of last year.

Inflation for the week ending 2 February, 2007, was revised downwards to 6.11 per cent from 6.31 per cent.

During the week under review, the prices of fruits, vegetables, wheat, arhar, barley among other food products declined, while prices of poultry chicken, bajra, masur, fish-marine and jowar rose.

Cement prices increased by 1 per cent, while rates of various kinds of edible oils also appreciated. The highest increases were recorded in the prices of some minerals like ochre, fluorite and magnesite, which shot up by 22-33 per cent.

"The high inflation for three weeks in a row will put further pressure on interest rates ahead of the RBI's monetary policy next month. The figures are likely to be revised in the days to come," D K Joshi, principal economist, Crisil, said.

Inflation may moderate next month due to a good harvest of wheat. However, there will be pressure on the central government to procure wheat, as the market price is higher than the minimum support price of Rs 750 and a bonus of Rs 100 per quintal.