Consumer Price Index Inflation For Month Of March Stood At 4.28%

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ew Delhi: The government data has shown on Monday that the Consumer Price Index (CPI) inflation for the month of March stood at 4.28 per cent. April thus became the sixth straight month of inflation above the Reserve Bank of India's (RBI) 4 per cent medium-term target. Inflation based on CPI or retail inflation as it is better known, shot up to 4.58 per cent for the month of April.

Inflation picked up for the first time since January this year on back of surge in petrol, diesel prices as the CPI for fuel and light inflated by 6.59 per cent on a year-on-year basis in April. Inflation on vegetables also went up by 11 per cent. However, the overall food inflation shot up by 3.75 per cent, moderated largely by falling price of pulses.

The inflation came exceeded expectation as a Reuters poll of economists predicted it to come at 4.42 per cent.Along with the rise in inflation, a jump in the global price of oil, India's costliest and largest import, overestimated government expenditure and a sharp weakening in the rupee could cause the RBI to review its long-standing neutral stance

 Minutes from RBI's Monetary Policy Committee April 4-5 meeting showed members flagged multiple concerns, including an increase in minimum support prices for farmers and crude oil prices.

"We continue to expect a pre-emptive rate hike by the Reserve Bank of India at its August policy meeting. Whether the hike will be one-off or followed up by another hike this year would be data-dependent. Nevertheless, chances of two rate hikes in 2018 have increased," said SumedhDeorukhkar, Senior Economist, BBVA, Hong Kong, after the numbers were released.

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