The jump was mostly driven by higher food prices due to back to back droughts, reported Bloomberg. Consumer prices rose faster than expected in May due to higher food prices, official figures showed on Monday, which will likely hold off an increase in interest rates. “The recent pickup in Indian inflation is due to higher food prices, not a pickup in overall inflationary pressures,” Bill Adams, senior international economist at PNC Financial Services Group, said in a statement to AFP. The inflation rate increased by 5.76% from a year earlier, substantially higher than 4.8% recorded in March and 5.4% in April, reported the statistics ministry. The RBI’s April rate cut, designed to lower the cost of borrowing and provide a boost to the economy, took the key interest rate to 6.5%, its lowest level since early 2011.

Source: Hindustan Times June 13, 2016 14:15 UTC