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New Delhi: Indian inflation held steady above 12 per cent in mid-September, even as economists said volatile crude oil prices and the chance of a spike in some food costs would force the central bank to keep policy tight.
The wholesale price index, India's most widely watched price measure, rose 12.14 per cent in the 12 months to September 13, unchanged from the previous week and below a forecast for an annual rise of 12.23 per cent.
"We are still seeing very strong price pressures from the primary articles group and this week we have also seen very high volatility in global crude prices," said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.
"So going ahead, we will continue to see an upward tendency in inflation."
Others analysts said a hefty revision, also released this week after a series of more modest amendments, showed price pressures were yet to ease.
The inflation rate for the 12 months to July 19 was revised upwards to 12.54 per cent from the previously reported 11.98 per cent.
Most economists expect inflation to stay in double digits for some months and lower output of some crops could push up food prices in the medium term.
Food prices dominate the primary articles group, and floods in some regions and forecasts of lower output of some crops could fuel inflation in the weeks ahead.
Prime Minister Manmohan Singh expects inflation to moderate as the steps taken by authorities take effect.
However, on Thursday, statistics chief Pronab Sen said the inflation rate was likely to remain above 10 per cent until the end of January due to a statistical base effect and higher prices of manufactured products.
The Reserve Bank of India lifted its main lending rate in both June and July to tame inflation, and it now stands at a seven-year high of 9 percent. It has also raised banks' cash reserve requirements to trim demand and cool prices.
A poll earlier this month showed economists had scaled down expectations of further interest rate increases in 2008-09 as recent policy steps and lower oil prices were seen cooling double-digit inflation.
A rise in fuel prices in June pushed inflation into double digits, and in early August it soared to 12.63 per cent, the highest reading since data series became available in April 1995.
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