In its Annual Report 2012-13, Reserve Bank of India (RBI) raised concern about rising food and fuel prices, which may put upward pressure on Wholesale Price Index (WPI) and Consumer Price Index (CPI).
Owing to the rise in food and fuel inflation, WPI rose to 5.8 percent in July 2013.
RBI also raised concern about the double digit CPI inflation despite moderation in WPI inflation.
On the backdrop of significant depreciation of the rupee, there could be an upward pressure on inflation, RBI said in the report.
The central bank expects the WPI inflation to hover around 5.5 percent during 2013-14, keeping in view the domestic demand-supply balance, the outlook for global commodity prices and the forecast of a normal monsoon.
The central bank assured that it would contain WPI around 5 percent by March 2014 through use of all instruments at its command.