India-Inflation-Moves Up
Inflation in India inched up to 11.91 percent mainly due to higher prices of some food items and various petroleum products which may prompt Reserve Bank of India (RBI) to further tighten money supply in its quarterly review slated for 29th July.

During the week ending 5th July, inflation moved up marginally by 0.02 percent from 11.89 percent in the previous week and 4.61 percent in the corresponding week a year-ago.

The wholesale price index-based inflation rose moderately on account of higher prices of fruits, tea, maize, masoor, moong, coconut and imported edible oils.

Despite attempts made by the government to tame price rise, iron and steel and unregulated petroleum products like furnace oil, ATF, bitumen, light diesel oil and naptha too became expensive during the week.

However, the prices of cement remained stable, while vegetables and salt became cheaper during the week.

Rising inflation may force RBI to further hike short term interest rates as well as statutory deposit requirements when it reviews the credit policy later this month.

RBI had already increased rate and CRR by 0.5 percent each to tame inflation on 24th June.

Finance Minister P Chidambaram said on Thursday that there is pressure on prices, though the steps taken by the RBI in the recent past have resulted in moderation of money supply.

The tightening of money supply, he added, can be seen from escalating overnight interbank call money rates, which have gone up to 7-9.1 percent on Wednesday.

The government too in the recent past had taken host of fiscal measures, including export curbs on various food items and ban on futures trading on some agri commodities, to tame price rise.