Inflation based on wholesale price index rose to 5.77% in June, which is the highest in 4 years. Mainly, inflation of inflation has increased due to high prices of vegetables and fuel. Inflation based on wholesale price index was 4.43% in May and 0.90% in June last year.

According to the inflation in the category of food items, it was 1.80% in June 2018, which was 1.60% in May. Vegetable prices were 8.12% higher on an annual basis. Vegetables prices rose 2.51% in May. Inflation in electricity and fuel sector increased to 16.18% in June, which was 11.22% in May.

The main reason for this is the rise in the cost of crude oil in the global market. Potato prices were 99.02% higher than the year before. In May, the inflation in potato was 81.93%. Similarly, onion prices were 18.25% in June, which was 13.20% in the previous month. The price of pulses has remained declining. In June, the prices of pulses of pulses fell 20.23% on an annual basis. The government has revised the wholesale price inflation for April to 3.62%. Initial data was estimated to be 3.18%.

Retail inflation figures were released last week. Retail inflation based on Consumer Price Index was 5 percent in June, which is a high of five months. It is notable that in order to determine the monetary policy of the country, the Reserve Bank mainly uses Retail Inflation figures.

The rising inflation rate is according to the Reserve Bank's estimates. In its latest estimate, the bank has estimated retail inflation at 4.7% for the October-March quarter. Earlier, its forecast was 4.4%. In the previous meeting of monetary policy review, the Reserve Bank had hiked interest rates by 0.25%. The central bank has increased the policy rate four years later. The next three-day review meeting of the Monetary Policy Committee will be held between 30 July and 1 August.



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