Causing some sort of discomfort to the government the inflation rate rose to 4.41 per cent for the week ended July 14 after remaining steady for two consecutive weeks at 4.27 per cent.

The annual inflation rate was 4.62 per cent during the corresponding week last year, the latest data on price index shows. However, the inflation, which of late has started showing signs of rising trend, managed to stay below the psychological barrier of five percent for the eighth consecutive week.

Tight monetary policy
Ahead of the Central Bank’s monetary policy review on July 31, analysts say they do not see any reason for a further rise in interest rates. As part of strategy to curb inflation the RBI has been resorting to tight monetary policy by raising short term lending rate (Repo rate) thereby hardening the overall interest rate. With the hardening of interest rate the housing loan and personal are becoming costlier.

The RBI has cautioned that it would stick to tight monetary policy if the overall inflation does not remain in the “tolerable” limit of 4 to 4.5 per cent for a considerable period of time.

However, analysts feel that the RBI is unlikely to further tighten the monetary policy when it undertakes monetary policy review next week.