India Inflation Accelerates in August; Adds to Pressure on RBI to Keep Rates High
09/18/2012| 04:11am US/Eastern
By Anant Vijay Kala
NEW DELHI--India's consumer price inflation accelerated in August, mirroring a similar increase in wholesale prices and adding to pressure on the central bank to keep interest rates elevated despite mounting growth worries.
Consumer prices rose 10.03% in August from a year earlier, compared with a 9.86% increase in July.
The data come after government figures released Friday showed wholesale prices rose 7.55% in August, picking up from July's 6.87% increase, reinforcing concerns that inflation continues to rise at an uncomfortably fast pace despite a nearly three-year effort by the central bank to bring the situation under control.
The inflation reading also comes after the Reserve Bank Of India on Monday kept its key lending rate unchanged for the third consecutive meeting, but marginally eased a cash reserve requirement for banks.
The rise in consumer prices was mainly due to a 12% increase in food prices. Fuel prices rose 7.55%, which doesn't yet reflect the government's decision last week to raise diesel prices by 5 rupees per liter.
Data also showed the inflation rate in urban areas accelerated to 10.19% in August from 10.10% in July. In rural areas, the rate rose to 9.90% in August from 9.76% in July.
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