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- Wholesale Inflation Stood At 10.66% In September; Highest Inflation In Petrol, Diesel And Gas
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In the pre-festivals, ie last month, there was a slight reduction in wholesale inflation. Wholesale inflation stood at 10.66% in September as against 11.39% in August. As far as last year is concerned, the wholesale inflation rate in September 2020 was just 1.32%. The main reason for the decline in wholesale inflation last month was the fall in the prices of food items. However, there was a sharp jump in the prices of petroleum products last month.
Wholesale inflation above 10% for the sixth consecutive month
Wholesale inflation remained above 10% for the sixth consecutive month in September, but food items became cheaper for the fifth month in a row. According to the statement of the Ministry of Commerce and Industry, “The reason for the higher wholesale inflation in September 2021 was the increase in the prices of mineral oil, base metals, non-food articles, crude oil and gas, chemicals and chemical products.”
4.69% drop in food prices
Food prices declined by 4.69% year-on-year in September. In August also, food inflation remained negative at 1.29% due to falling vegetable prices. However, last month, pulses prices jumped 9.42% year-on-year. The highest inflation rate of 24.91% was in the fuel and power basket as against 26.09% in August. Crude oil and natural gas prices jumped 43.92% last month, compared to a year-on-year increase of 40.03% in August. Oilseeds saw the biggest jump of 51.13% in September, while the wholesale prices of vegetables saw the sharpest fall of 32.45%.
RBI fixes key policy rates according to retail inflation rate
RBI fixes key policy rates according to the inflation rate. But for that, he makes the basis of retail inflation, not wholesale. Retail inflation in September stood at 4.4%, a five-month low. RBI had kept key rates – repo and reverse repo – at record levels last month. The rate at which banks take short term loans from RBI is the repo rate. The reverse repo rate is the opposite.