April 26, 2008	Saturday	Rabi-us-Sani 19, 1429

NEW DELHI, April 25: India’s annual inflation rate jumped to a more than three-year high on Friday, piling pressure on central bankers to keep a hawkish stance at a key policy meeting next week.

Annual inflation accelerated nearly two-tenths of a percentage point to 7.33 per cent for the week ended April 12 amid surging global food and energy costs.

Inflation, which has more than doubled in four months, has become a central issue with taming prices the main goal of the Congress-led government.

Prime Minister Manmohan Singh appealed to the opposition “to eschew the temptation of politicising” the problem and said the government was taking “all necessary steps” to tackle inflation, including raising domestic purchases of wheat and rice that would ease inflation.

The latest inflation number came after the central bank ramped up its inflation fight last week by seeking to cool demand through reducing cash for commercial loans. It hiked by 50 basis points the portion of reserves commercial banks must set aside to 8.0 per cent the highest in seven years.

More monetary tightening could be in store next Tuesday when the central bank holds its annual policy meeting, analysts said. But many expected the Reserve Bank of India to take a wait-and-see stance after the government this week forecast record grain harvests for the crop year which ended March 31.

The weather office has also said it expects a better-than-average monsoon which would help crops in the current year and domestic steel manufacturers have promised to hold the line on steel prices.

“There have been some positive domestic developments,” D.K. Joshi, economist at Crisil credit rating agency, told AFP.

“If the bank is extra-cautious, it could raise rates but with the adverse global scenario and the tightening already taken, economic growth is already on a downward trajectory and so demand pressure is easing up on its own,” he said.—AFP