Driven by higher prices of fruits and vegetable, cereals and some manufactured items such as iron and steel and edible oil, inflation grew to a new 13-year high of 11.63 per cent. During the week ending June 21, inflation moved up by 0.21 per cent from 11.42 per cent in the previous week and 4.32 per cent in the corresponding week a year ago. The wholesale price index-based inflation inched up on account of higher prices of unrefined oil that soared by eight per cent, tea by four per cent, fruits and vegetable, sea fish, maize and bajra by two per cent each.
At the same time, pulses, including urad and moong and spices became expensive by one per cent each.
Despite attempts made by the government to tame price rise, items like iron and steel, edible oils and cement became costlier during the week.
RBI may take further anti-inflationary measures, Galloping inflation may force RBI to further hike short term lending rate to banks as well as statutory deposit requirements when it reviews the credit policy on July 29.
To anchor inflation, the central bank is likely to increase repo rate by a further 25 basis points and CRR by another 50 basis points during the month, Crisil Principal Economist D K Joshi said.
RBI has already increased repo rate and CRR by 0.5 per cent each to tame inflation on June 24.
According to Goldman Sachs, the apex bank is expected to hike another 100 basis points through a combination of raising the repo rate, 50 basis points compared to the earlier expectation of 25 basis points and the CRR by 50 basis points over the next 3 months, with risks towards more tightening.
"With global crude prices going up further, inflation is also set to rise. However, the truckers strike which has been called off is unlikely to have any significant impact on the rising price," Joshi said.
On Thursday, New York's main oil contract, light sweet crude for August delivery, surged past 145 for the first time to reach an all-time pinnacle of $145.43 a barrel.
High oil price regime
Planning Commission Deputy Chairman Montek Singh Ahluwalia had said the country has to learn to live with high oil price regime, while the Petroleum Secretary had indicated that the government will review the retail prices in October.
The government last revised retail petroleum prices with effect from June 5, when petrol prices was increased by Rs 5 a litre, diesel by Rs 3 per litre and cooking gas by Rs 50 per cylinder.
This resulted in inflation touching double digit figure of 11.05 per cent for the week ended June 7.
As a part of anti-inflationary measure, the government on Thursday prevailed upon industry to cut prices of select iron and steel products by up to 10 per cent.
Inflation at 12 per cent mark
According to Saugata Bhattacharya, vice president Axis Bank, inflation would continue to rise and hit 12 per mark in the next month on account of rising crude and food items.
Among other food articles, prices of mustard seed, castor seed went up by one per cent. However, fuel index declined by 0.1 per cent on account of lower prices of furnace oil.
Manufactured items that have become expensive include medicine, phenol, dhoti, sari, bicycle, dry cells, switch gears in the range of 1-10 per cent.
The government, meanwhile, has revised inflation data for the week ended April 26 to 8.27 per cent from the provisional figure of 7.61 per cent.