Food inflation in India accelerated in the week ended May 14, diminishing hopes of any near-term relief for consumers from red-hot prices and mounting pressure on the central bank to tighten monetary policy more.
The wholesale price index for food articles rose 8.55% from a year earlier, quicker than the 7.47% rise in the week to May 7, according to data issued Thursday by the Ministry of Commerce and Industry. The index was up 0.6% to 186.7 week-on-week.
Bond prices fell slightly, with the 8.08% paper maturing in 2022 down at an intraday low of 96.92 rupees from 96.96 rupees before the data and 97.17 rupees at Wednesday's close.
Rupa Rege Nitsure, chief economist at state-run Bank of Baroda, said the Reserve Bank of India will likely maintain its tightening bias for quite sometime as food and fuel prices aren't expected to fall anytime soon.
The RBI has raised its lending rate by 2.5 percentage points since March 2010 and is widely expected to increase it by up to one percentage point more by next March.
As China, India and Brazil continue to deal with high inflation, the rest of the world will continue to have slower growth.