Inflation falls but Reddy hints at rate hike

TOUGH GOING: Inflation has fallen marginally from 7.15 per cent to 7.41 per cent.

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New Delhi: Inflation has fallen marginally from 7.15 per cent to 7.41 per cent. The fall, however, could be largely statistical.

Vegetable prices in particular have shot up over 10 percent even though the cost of edible oils has lowered.

Part of the fall is due to the base effect - it was a high 6.44 per cent in the corresponding week last year.

Meanwhile, RBI Governor Y V Reddy, hinting at a rate hike, told CNN-IBN on that inflation level was too high. He said the Government needs to show that it is being proactive in bringing prices down.

“The Government has to demonstrate that it’s trying to do something,” Reddy had said. “If the Government is not trying to find medium-term solution, they have to at least show that sensitivity to the problem.”