RBI may hike rates again in August on rise in inflation

RBI may hike rates again in August on rise in inflation

India's provisional consumer price inflation rate for May stood at 4.87% compared to the same month a year ago, data released by the Ministry of Statistics and Programme Implementation showed on Tuesday.

On a month-on-month basis, the food index increased by 1.33 per cent in May, up by 0.42 per cent points from 0.91 per cent recorded in April.

The RBI in its bid to tighten inflation, increased repo rate last week, for the first time in more than four years.

It was thought that any increase in inflation could help tip the Bank more towards rate action by the Bank but sterling slipped 0.4% against the dollar to $1.33 - driven down again in recent weeks on lower rate expectations and continuing Brexit uncertainty.

Analysts polled by Reuters had forecast May's CPI inflation at 4.83 percent, compared with April's 4.58 percent.

So far in 2018, retail prices of petrol have climbed 9.2 percent and diesel by 13.7 percent in the capital, Delhi.

Nigeria's annual inflation has dropped to 11.61% in May, below the federal government's projection of 12.42% set in the 2018-2020 Medium Term Expenditure Framework and Fiscal Strategy Paper.

Inflation rate increased by 1.09% on month-on-month basis. This reduction is the sixteenth consecutive time inflation rate has been dropping since January, 2017.

"Air fares and ferry prices also contributed to the overall increase in inflation due to the timing of Easter". This rise in the index was caused by increases in prices of Potatoes, yam and other tubers, Vegetables, Fish, Bread and cereals, Fruits and Meat.

It stated the percentage change in the average composite CPI for 12 months period ended May over the average of CPI for the previous 12 months period.

The corresponding 12-month year-on-year rural inflation rate in the period under review is 14.53% compared to 14.95% in April 2018 while the corresponding urban index is 15.10% which is less than 15.47% reported in April, 2018.

Also, it noted the rural index rose by 1.08 per cent in May, up by 0.26 per cent from the rate recorded in April (0.82) per cent. This is higher than the final figure of 4.58% for April. Yobe State (13.68%) and Jigawa State (13.62%) followed in that order, while Kwara State (8.87%) recorded the slowest rise in price during the period.

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