India’s inflation hit a three-month high in June, data showed Monday, against the backdrop of a weak currency, dampening hopes for interest rate cuts to spur a sharply slower economy.

The Wholesale Price Index, India’s closest-watched price gauge, climbed to 4.86 percent from a year earlier, up from 4.70 percent in the previous month.

The Indian currency, meanwhile, softened by nearly half a rupee against the dollar to trade at 59.96 rupees to the greenback, nearing lifetime lows.

“The 11 percent depreciation of the currency since early May means the chance of the Reserve Bank of India cutting interest rates at its next meeting on July 30 is close to zero,” said Credit Suisse economist Robert Prior-Wandesforde.

“In fact, there is probably a higher risk of hikes than cuts right now,” he noted.

The rupee, which has hit a string of record lows, and accelerating wholesale prices after months of slower growth, have curbed the bank’s room to cut to stimulate an economy growing at 5 percent, its weakest pace in a decade.

The economy has been struggling under high interest rates, strong consumer inflation and weak domestic and foreign investment, as well as a raft of graft scandals embroiling the Congress-led government.

The central bank has cut rates three times since the start of 2013 following an aggressive hiking spree, but borrowing costs remain high, dampening demand.

But economists say further rate cuts could lead to an even weaker rupee, pushing up the cost of imports and widening India’s gaping current account deficit – the broadest measure of trade – that has alarmed global credit ratings agencies.

The rupee slid to a record low of 61.21 to the dollar early last week but has firmed slightly following steps by authorities to seek to restrict speculation in the currency.

The Indian unit just a few months ago was trading in the mid-40 rupee range to the dollar.

Politically sensitive food prices rose by 8.34 percent in June while the cost of onions – a staple in every Indian diet – had soared by 114 percent, the wholesale price data showed Monday.

The Indian government has been desperate to tame inflation, especially of food, as it seeks a third term with general elections due by May 2014.

The government fears a vo¬≠ter backlash from India’s poor masses who are hardest hit by price rises.

The latest figures followed data last week showing that urban consumer inflation, which focuses more on food, hit 10.13 percent in June while overall consumer inflation, which includes rural areas, was at 9.87 percent.