RBI Rate Hike Looms as Crude Prices Soar and Monsoon Fails

Rising crude oil prices and food inflation risks from a below-normal monsoon could prompt the Reserve Bank of India (RBI) to consider a rate hike in October, economist Sunil Sinha said.

Sinha pointed out that 'hidden inflation' is lurking on the horizon due to higher oil costs not yet being passed on to consumers.

Global crude prices have climbed again after briefly easing on hopes of a truce in the Middle East, but the latest increase has not yet translated into higher domestic retail fuel prices.

The average import price of oil in India was around USD 114 a barrel last month, while Brent crude was trading at around USD 97.35 per barrel and crude oil at around USD 90.05 per barrel at the time of reporting.