FINMIN closely monitoring price situation

New Delhi, June 20 (UNI) Concerned at the rising price situation, the Finance Ministry has stepped up vigilance to monitor global and domestic factors contributing to the inflationary presures.

The main source of global inflation is the international crude oil price hike, which has now become the cause of worry for the developed world as well as open economies in developing countries, Finance Ministry sources said here today.

On the domestic front, the rising prices of some agricultural commodities-- pulses and wheat-- are stoking the fires of inflation, the sources said.

The sources said as economies like India get more closely integrated with the global system some spillover of inflation into the domestic system, was inevItable.

The sources said internal meetings are on in the Ministry to keep a close tap on the inflationary situation.

It justified the import of the agricultral commodities to stem over inflation.

After a cycle of four years of low inflation, low interest rates and high growth, a situation has emerged where interest rates are hardening and inflation is creeping upwards in many countries of the world.

The sources said it would be extremly hazardous to guess where the prices are heading internationally as much would depend on the direction global crude oil prices take.

This also makes the task of projecting inflation rates in India difficult and explained that the Indian government had little control over international factors.

Nevertheless, the government was seized of the matter and would spare no efforts to keep prices under check, they said.

UNI GS VJ DB2045