Wholesale price index (WPI) for the week ended February 3, 2007 increased to 6.73 percent because of manufactured products, compared to previous week's figure of 6.58 percent. This WPI is the highest in past two years and it surpasses industry's anticipation of 6.50 percent.
Recently the Reserve Bank of India (RBI) upturned cash reserve ratio (CRR) by 50 basis points to 6 percent, to be executed in two phases. First hike, comprising 25 points, will be implemented from tomorrow while the second is scheduled for March 3.
RBI will be taking steps to contain inflation within 5-5.5 percent target for 2006-07 as precaution, in response to latest statistics. CRR hike of February 17, 2007 is supposed to calm down inflation in the medium term.
For the week under consideration, WPI for all commodities reached 209.2 points. Index for manufactured products, accounting for 63.75 percent of the WPI, went up 0.3 percent to 181.9.
Drop of 11 percent in price of aviation turbine fuel and one percent each in that of naphtha and furnace oil has decreased the index for fuel, power, lubricants and light by 0.4 percent to 320.8.
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