WPI inflation spikes to 4-yr high of 5.77% in June

New Delhi: Inflation based on wholesale prices accelerated to over 4-year high of 5.77 per cent in June on increasing costs of vegetables and fuel items, raising chances of a rate hike by the RBI in its monetary policy review next month.

The Wholesale Price Index (WPI) based inflation stood at 4.43 per cent in May and 0.90 per cent in June last year, as per the government data released today.

Inflation is at the highest level since December 2013, when it was at 5.9 per cent.

Retail inflation, which the Reserve Bank of India takes into account while formulating its monetary policy, had touched a 5-month high of 5 per cent in June. It is based on Consumer Price Index (CPI).

RBI targets to keep inflation at 4 per cent, (+/- 2 per cent), and its rise beyond this comfort zone will put pressure on the central bank to hike rates.