New Delhi, August 7 : For the first time in 13 years inflation crossed 12 per cent, at 12.1 per cent, for the week ended July 26, on the back of costlier food items.
Rise in prices of certain food articles and manufactured products pushed inflation to a 13-year high of 11.98 per cent for the week ended July 19.
The increase prompted economists to predict another 25 basis points increase in the central bank's short-term lending rates.
In fact, the Reserve Bank of India (RBI) at its quarterly review said, "Bringing down inflation from the current high levels and stabilising inflation expectations assume the highest priority in the stance of monetary policy."
Last week, the RBI raised its key lending rate for the third time in two months, taking it to its highest in seven years to keep inflation in check. The apex bank hiked the benchmark short-term rate by 50 basis points, and the cash reserve ratio, the amount of funds banks must keep on deposit with it, by 25 basis points to 9 per cent to absorb surplus cash in the banking system.
Inflation, which stood at almost 12 per cent in mid-July, has more than doubled since late February after a sharp increase in government-set retail fuel prices in June, prompting the RBI to resume interest rate increases after a pause of more than a year.
--- ANI
