June WPI inflation at 4.86%; food inflation up

The Wholesale Price Index (WPI) inflation for the month of June came in better than expected at 4.86 percent. Core inflation came in at 2 percent. Although the numbers brought about some cheer in the market after weak IIP and auto sales numbers, the growth in food inflation number was a dampener.

PMEAC chairman C Rangarajan said inflation appears to be stabilizing. But said although food articles have gone up but manufacturing inflation of the month has come down.  He told CNBC-TV18 that food inflation can moderate in view of a good monsoon.  He also sees manufacturing inflation getting impacted by the depreciation in rupee.

However an uncomfortable CPI number will not allow a rate cut announcement in RBI's July monetary policy.