<p>With inflation hovering over double digit figures, there is growing apprehension that Reserve Bank, may come under pressure to further curb money supply in a bid to further harden interest regime. Tight monetary policy will force commercial banks to raise lending rates, thereby making all sorts of borrowing, including housing, car and personal loans. <br />Finance Minister Pranab Mukherjee attributed the rise in double-digit inflation to hike in prices of petroleum products.<br /><br />However, he hoped that prices would moderate by the end of the kharif season, and inflation would come down to 5-6 per cent by the year-end. Analysis of inflation data shows that in June, the fuel index rose by 1.7 per cent, due to higher prices of kerosene (9 per cent), electricity (4 per cent), petrol (2 per cent) and liquefied petroleum gas (3 per cent).<br />Though theswelling in inflation is primarily due to rise in food prices, data showed that the prices of food articles rose marginally by 0.20 per cent during June as prices of cereals, rice and wheat declined on a month-on-month basis. However, food items like urad turned costlier by 9 per cent and meat and fish by 7 per cent.<br /></p>
<p>With inflation hovering over double digit figures, there is growing apprehension that Reserve Bank, may come under pressure to further curb money supply in a bid to further harden interest regime. Tight monetary policy will force commercial banks to raise lending rates, thereby making all sorts of borrowing, including housing, car and personal loans. <br />Finance Minister Pranab Mukherjee attributed the rise in double-digit inflation to hike in prices of petroleum products.<br /><br />However, he hoped that prices would moderate by the end of the kharif season, and inflation would come down to 5-6 per cent by the year-end. Analysis of inflation data shows that in June, the fuel index rose by 1.7 per cent, due to higher prices of kerosene (9 per cent), electricity (4 per cent), petrol (2 per cent) and liquefied petroleum gas (3 per cent).<br />Though theswelling in inflation is primarily due to rise in food prices, data showed that the prices of food articles rose marginally by 0.20 per cent during June as prices of cereals, rice and wheat declined on a month-on-month basis. However, food items like urad turned costlier by 9 per cent and meat and fish by 7 per cent.<br /></p>
