WPI inflation at (-)3.81% in Oct; pulses, onion expensive

WPI inflation at (-)3.81% in Oct; pulses expensive

Deflationary pressure eased a bit with inflation rate moving up slightly to (-)3.81 per cent in October as pulses, vegetables and onion turned costlier.

This is 12 month in a row when the inflation at wholesale level remained in the negative territory. It has been in the negative zone since November last year.

The Wholesale Price Index-based inflation was (-)4.54 per cent in September. In October last year, it was 1.66 per cent.

Pulses and onion among the food items category turned costlier with inflation at 52.98 per cent and 85.66 per cent respectively during October.

The rate of price rise in case of vegetables was at 2.56 per cent as against (-)19.37 per cent in the same month last year, as per official data released on Monday.

Besides pulses and onion, the food items which became dearer during the month were milk (1.75 per cent) and wheat (4.68 per cent). However, inflation rate in case of potato was in the negative zone, (-)58.95 per cent.

Inflation rate in fuel and power segment was (-)16.32 per cent, while that in manufactured products was (-)1.67 per cent in September.

Inflation for August has been revised to (-)5.06 per cent, from the provisional estimate of (-)4.95 per cent.

The Reserve Bank of India would take into account WPI number for October while deciding on policy rate in its December 1 monetary policy review. RBI mostly tracks the Consumer Price Index-based retail inflation for its monetary policy decisions.

Rising for the third straight month, retail inflation has climbed to 5 per cent in October, as against 4.62 per cent in the same month a year ago due to costlier pulses and other food items.

RBI Governor Raghuram Rajan earlier this month had said that the central bank is comfortable with the current rate of interest till further room is available.

In September, RBI had reduced interest rates by more than expected 0.50 per cent and said it expects CPI inflation to reach 5.8 per cent in January 2016.