Rise in Inflation again !

Inflation inches up to 11.91 percent

For the first time in more than 13 years, the annual inflation rate climbed to 11.91 per cent in early July, driven by higher costs of commodities and strong demand in the economy.

This is a quarter per cent jump week on week.

It would be the 22nd consecutive week that the inflation rate has been above 5.5 per cent, the central bank's target for the end of the fiscal year in March 2009.

The Cost Price Index inflation is projected to remain this year at 4.8 and 3.2 per cent in the US and the UK, respectively, and 8.8 per cent in the emerging markets. The highest inflation is projected at 15.3 per cent in the CIS counties and at 12.8 per cent in the Middle East and North Africa.

In India, too, there seems to be no respite in sight with the Wholesale Price Index inflation projected to remain in double-digit territory until May 2009.

For the week-ended June 28, wholesale prices-based inflation touched a new 13-year high of 11.89 per cent, much higher than the RBI tolerance limit of 5.5 per cent for the current fiscal.

The WPI moved up from 11.89 percent in the week ending June 28, to 11.91 per cent in the week ending July 5.

Rupee hits over 17-month low at 44.20/23 dlr in early trade

The Indian rupee hit a 17-month low at 44.20/23, 28 paise cheaper from its last close against the greenback, during morning trading today on heavy dollar demand from importers amid weak equity markets. In fairly active trade at the Interbank Foreign Exchange (forex) market, the domestic currency opened lower at 44.20/23 a dollar from its last weekend's close of 43.92/93 a dollar as oil refiners stepped dollar purchases after global crude oil prices surged in Asian trade.

The rupee later recovered to 44.14/15 a dollar in late morning deals. The local unit had last touched this level on March 14 last year when it closed at 44.2450/2525 against dollar.

Forex dealers said there was heavy dollar demand from oil companies following a rise in global crude prices by nearly one dollar to 116.40 dollar a barrel in Asian trade today. They said the intervention by Reserve Bank could not be confirmed but some state-owned banks were believed to be selling dollars at higher levels.

Meanwhile, the Indian benchmark Sensex fell back by 108 points at 1030 hrs, while Asian indices were trading sharply lower during morning trading.