Inflation will moderate with fresh agri supplies: FM

New Delhi, Oct 13: Finance Minister P Chidambaram today expressed the hope that the rise in inflation rate to 5.16 per cent would not put pressure on interest rates in view of the ample liquidity in the system and that the price would moderate once fresh supplies of wheat and sugar arrive in the market.

Talking to newspersons here, Mr Chidamabaram said inflation crossed the five per cent mark due to hike in fuel and lighting components.

The Finance Minister avowed that the government aims to bring the inflation rate to below four per cent.

Mr Chidambaram was of the view that the effect of the rise in prices of the two commodities was a little exaggerated as the price rose on a declining base last year.

The Finance Minister said if supply side constraints persist then inflation will hover bewteen four to five per cent. But medium term moderation will set in after the supply side constraints cease, such as those pertaining to fresh stocks of wheat and sugar.

The annual rate of inflation rose to 5.16 per cent for the week ended September 30, as against 4.77 per cent in the previous week, higher food prices being an important component of this.

UNI

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