Inflation will fluctuate for couple of months: Pranab

Finance Minister Pranab Mukherjee today said inflation will fluctuate for a couple of months and will stabilise after that.

"Couple of months there will be fluctuations [in inflation]... So I do hope that after couple of months it will stabilise," he told reporters after chairing the RBI's central board Meeting here.

Mukherjee, however, added that inflation will not come down drastically to 4-4.5%. "It would be around 6.5% to 7% for the year as a whole, he said.

On the food inflation, he said steps have been taken to address the supply constraints of major agricultural products and they are constantly being reviewed.

"From the monetary side as and when Governor RBI [D Subbarao] will find appropriate, taking into account all factors prevailing at that point of time, he will take appropriate measures," Mukherjee said.

Wholesale price-based inflation, which remained high during most of 2011, has started showing signs of moderation and was 6.95% in February.

Retail inflation was at 8.83% in February on account of higher prices of protein based items and edible oil products.

Mukherjee, yesterday, had said that he was expecting lowering of interest rates by RBI in the coming months in the wake of moderation in inflation.

RBI had raised the short-term lending (repo) rate 13 times since March 2010 in its bid to fight inflation. Industry is complaining that high interest rate regime has made cost of credit costly and hence impacting business activities.

Though the RBI has lowered the cash reserve ratio (CRR) twice recently, credit continue to be costly.