Inflation seen nearing 11.42%

Inflation for the week ended June 7 had hit a 13-year high of 11.05 per cent. This had prompted the Reserve Bank of India to raise two key rates in a bid to control monetary expansion.

The latest rise is being attributed to an increase in commodity prices, especially steel, and the continuing pass-through of higher fuel prices.

Experts did not foresee a further tightening of monetary policy between now and the first quarter review of the policy scheduled for July 31. But they cautioned that the RBI had resolved to respond swiftly with both conventional and unconventional measures if inflation was not tamed.

The likelihood of the government taking further fiscal and administrative measures to ease the supply position too cannot be ruled out.

Finance Minister P Chidambaram today warned that inflation will remain in double digits for a few more weeks. He told a private news channel that it was difficult to say how much higher inflation would rise.

But he added that he expected inflation to begin to moderate in three months: "The target is to moderate inflation