India's wholesale price index rose 7.61 per cent in the 12 months to April 26, marginally higher than previous week's annual rise of 7.57 percent, government data showed on Friday.
The rate matched a median forecast of 7.61 per cent in a poll of analysts. It was the highest since an annual reading of 7.68 percent on Nov 13, 2004. Annual inflation for the week ended March 1 was revised to 6.21 per cent from 5.11 per cent.
The annual inflation rate was 6.01 per cent during the corresponding week of the previous year. The wholesale price index stood at 227.7 points in the week ended April 26.
"The fiscal and trade measures taken by the government should start having an impact in the coming weeks. Particularly the cut in steel prices announced by the steel producers should reflect in the index.
"However, with oil prices still firm, we expect the WPI index to remain above 7 percent in the coming weeks. We expect the RBI to keep policy rates unchanged in 2008, but hike the CRR by at least 50 basis points to manage liquidity."
The yield on the 10-year federal bond was unchanged at 7.86 per cent, steady from before the data. The partially convertible rupee was at 41.38/39 per dollar, unchanged from beforehand.
India suspended futures trading in four commodities this week for a period of four months after criticism from government allies that futures had contributed to rising inflation.
The RBI said last week it was raising the cash reserve ratio by 25 basis points to 8.25 percent, its highest level in seven years, to control inflation-stoking cash in the system.
The rise will take effect from May 24. The unexpected increase in the CRR, the amount of funds banks have to keep on deposit with the central bank, followed a two-stage rise announced earlier in April to 8.0 per cent.
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