Monetary steps will curb inflation: FM

"India will rely on monetary measures to tackle inflation, which has climbed to a 13-year high due to the cost of imported oil and other commodities," FM Palaniappan Chidambaram said on Wednesday. ������Inflation is driven by oil and commodity prices,'' he said. ������Anything that is imported adds to our inflation and the answer is to take monetary measures.Monetary measures work over a period of time.''
India's inflation accelerated to 11.91% in the first week of July. Faster inflation has eroded the government's popularity and may force the central bank to raise borrowing costs again at its next meeting on July 29. ������Monetary measures will take effect and inflation will moderate over a period of time,'' Chidambaram said. Inflation in India has tripled in the last six months. That prompted the central bank to twice raise its benchmark interest rate in June, pushing it to a six-year high of 8.5%. It also lifted the cash reserve ratio to 8.75%.