INSUBCONTINENT EXCLUSIVE:
Retail inflation rises further to 6.07% in February, above RBI's 2-6% target bandIndia's retail inflation rose a touch further in February
to 6.07 per cent from a year ago, up also from 6.01 per cent in January, above the Reserve Bank of India's upper end of its target bank for
a second month in a row, government data released on Monday showed.The Consumer Price Index (CPI) based retail inflation was 5.03 per cent
in February 2021.According to the data released by the National Statistical Office (NSO), the rate of price rise in the food basket was 5.89
per cent in February, up from 5.43 per in January.The RBI mainly factors in the CPI-based inflation while arriving at its bi-monthly
That higher inflation was for a period before the surge in crude oil prices from the escalating Russia-Ukraine war.Crude oil prices have
Ukraine, the biggest attack on a European state since World War Two."Inflation printed at 6.07 per cent in February, slightly higher than
This print, although does not reflect the increase in commodity prices due to Russia-Ukraine crisis
and the US Federal Reserve all but set to lift interest rates this week after price pressures rose at the fastest in 40 years there, is
likely to pressure India's central bank, which is focussed on growth
north of RBIs upper threshold limit
The inflation trajectory is weighed heavily on the upside with elevated commodity prices, pass through of earlier fuel price hikes and the
higher raw material costs
Bhardwaj, Senior Economist at Kotak Mahindra Bank.Still, higher inflation and the Fed tag-team will add to the RBI's dilemna further."This
is just not the base factor at play since there is a sequential expansion of 0.24 per cent in the CPI as compared to a contraction last
month...it is to be noted that it does not yet take into account the impact of the geo-political conflict between Russia and Ukraine and the
Reuters poll of economists had predicted annual inflation to touch 5.93%, a shade lower than the upper limit of the RBI's 2 per cent to 6
percent target band.Government data released earlier on Monday showed, wholesale price-based inflation (WPI) accelerated to 13.11 per cent
cent year-on-year, versus 32.27 per cent in January.WPI inflation has remained in double digits for the eleventh month in a row, beginning
April last year."Clearly, the data reinforces the presence of inflationary pressures in the manufacturing and the services sector,"
