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Inflation: Fear grips India's financial markets
As India's inflation surged to a record 13-year high on Friday, fear gripped financial markets and political circles hinted that the country is headed for an early general election.
As per the data on Frirday, inflation crossed all expectations with the figure rising to an unprecedented 11.05 percent for the week ended June 7, a 13 year high.
Analysts said that growth rates are likely to slow down and Reserve Bank of India is likely to increase cash reserve ratio one more time and increase interest rates. Manufacturing industry and banking sector shocked with the news of 13year high inflation.
The RBI hikes will be far ahead of its July policy announcements.
Banking majors Axis, ICICI and HDFC said that inflation figure is beyond expectations and monetory tightening is likely very soon from RBI.
During the week the index for fuel group rose 7.8 per cent due to higher prices of petrol (11 per cent), light diesel oil (21 per cent), LPG (20 per cent), naphtha (17 per cent), furnace oil (15 per cent), aviation turbine fuel (14 per cent), high speed diesel oil (10 per cent) and bitumen (7 per cent).
Among the primary articles prices of condiments and marine fish rose while the prices of fruits and vegetables declined.
The government also revised inflation rate for the week ended April 12 to 7.95 per cent as compared to 7.33 per cent as reported earlier.
Inflation rate stood at 4.28 per cent for the corresponding week in the previous year (June 7, 2007).
As India's inflation surged to a record 13-year high on Friday, fear gripped financial markets and political circles hinted that the country is headed for an early general election.
As per the data on Frirday, inflation crossed all expectations with the figure rising to an unprecedented 11.05 percent for the week ended June 7, a 13 year high.
Analysts said that growth rates are likely to slow down and Reserve Bank of India is likely to increase cash reserve ratio one more time and increase interest rates. Manufacturing industry and banking sector shocked with the news of 13year high inflation.
The RBI hikes will be far ahead of its July policy announcements.
Banking majors Axis, ICICI and HDFC said that inflation figure is beyond expectations and monetory tightening is likely very soon from RBI.
During the week the index for fuel group rose 7.8 per cent due to higher prices of petrol (11 per cent), light diesel oil (21 per cent), LPG (20 per cent), naphtha (17 per cent), furnace oil (15 per cent), aviation turbine fuel (14 per cent), high speed diesel oil (10 per cent) and bitumen (7 per cent).
Among the primary articles prices of condiments and marine fish rose while the prices of fruits and vegetables declined.
The government also revised inflation rate for the week ended April 12 to 7.95 per cent as compared to 7.33 per cent as reported earlier.
Inflation rate stood at 4.28 per cent for the corresponding week in the previous year (June 7, 2007).