Inflation continues upward march again

The annual inflation rate rose marginally to 11.98 per cent for the week ended July 19, from 11.89 per cent the previous week.This is the seventh consecutive week in which inflation has stayed in double digits. The inflation for the week ended May 24 was revised to 8.9 per cent. In the inflation break up, manufactured index was up 0.2 per cent, while prices of basic metals, alloys and metal products group went up marginally. The index for fuel, power, and light index remained unchanged. The textiles group went up by 0.9 per cent. The government said the inflation remains stable week-on-week basis. Concerned over the high inflation levels, the Reserve Bank of India in its July review increased both the cash reverse ratio and the repo rate by 25-50 bps. It also indicated that more tough measure would be taken in future if the money supply levels don’t come down to the required level. The central bank Governor, YV Reddy, indicated that inflation would stay at high levels in near future, before stating to moderate from the third quarter. Reddy expects inflation to drop to 7 per cent levels in the fourth quarter of this fiscal.