Food inflation eases marginally

19 November 2011: The effect of a slide in the festival-season demand has begun to show, as food inflation eased to 10.63 per cent for the week ended November 5 from 11.81 per cent in the previous week. However, prices of some vegetables, especially tomato, continued to surge.

The Reserve Bank of India (RBI) had, in its October 25 mid-quarter review of the monetary policy, hinted at taking a pause after having increased key policy rates 13 times since March 2010. The apex bank, in its latest quarterly review of the monetary policy reveals that, inflation to remain elevated till December on account of a demand-supply mismatch, before moderating to seven per cent by March 2012. Many economists have said high food inflation cannot be pinpointed to a few items, and it was becoming a larger systemic problem due to high input costs and rising demand.

Source: Business Standard