Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | What does high WPI inflation mean for interest rates? -Dinesh Unnikrishnan

What does high WPI inflation mean for interest rates? -Dinesh Unnikrishnan

Share this article Share this article
published Published on Apr 19, 2022   modified Modified on Apr 20, 2022

-Moneycontrol.com

The spike in WPI will put more pressure on the rate-setting body to initiate a tight policy stance

On April 18, the government data showed that India's inflation based on the Wholesale Price Index (WPI) rose to a four-month high of 14.55 percent in March from 13.11 percent in February. With this, the WPI inflation has now been in double-digit territory for 12 consecutive months.

What is the significance of this data? Under the current approach, the monetary policy committee (MPC) tracks retail inflation for the purpose of policy formulation. No one gives too much importance to WPI numbers. But, there's more than meets the eye in the numbers.

The higher wholesale price inflation could prove to be a point of worry for policymakers. WPI index is dominated by manufactured products which have a weight of 64 percent in the index and are influenced by global factors to a significant extent especially in the current context.

“Hence the tendency of global prices increasing gets reflected more in the WPI than CPI. This number has been above 10 percent throughout the year and only part of the explanation is in the low base effect,” said Madan Sabnavis, Chief Economist at Bank of Baroda.

Thus, higher wholesale prices are bound to reflect in the retail prices too going ahead. “With the war unleashing another round of price increases of commodities, we may expect producers to further increase their final prices in case there is no let down in the cost spiral,” said Sabnavis.

Please click here to read more.

Kindly click here to access the latest available data on retail inflation. 


Moneycontrol.com, 19 April, 2022, https://www.moneycontrol.com/news/business/analysis-what-does-high-wpi-inflation-mean-for-interest-rates-8381171.html?fbclid=IwAR1vQ7lBaNiZD-Q_cinMFC1fs85RFDvgGfhlU_4Ni8DDRpcfGmgKqUXJODo


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close