Persistent food inflation constrains monetary policy

Inflation just refuses to subside. The September numbers for both the wholesale price index (WPI) and the consumer price index (CPI), which were released on Monday, indicate that it has risen somewhat from its levels for August. WPI inflation in September clocked 6.46 per cent, up from 6.1 per cent in the previous month, while CPI inflation came in at 9.84 per cent, up from 9.52 per cent in the previous month. Since these are the last readings before the second-quarter review of monetary policy, scheduled for October 29, the rise in both indices may have implications for policy actions by the Reserve Bank of India (RBI).

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