RBI Guv likely to meet PM on inflation tomorrow

New Delhi, Jan 11 (PTI) Amid rising food inflation, PrimeMinister Manmohan Singh is likely to hold discussions withReserve Bank Governor D Subbarao tomorrow on the possibilityof further monetary steps to check price rise.

The Prime Minister, according to sources, may meet RBIGovernor to discuss price situation as part of the exercise totame food inflation which soared to year''s high of 18.32 percent on December 25.

Worried over rising prices of onion, other vegetables andmilk, Prime Minister met senior Cabinet colleagues earlier inthe day to work out a strategy to deal with rising inflation.

Singh''s meeting with Subbarao comes ahead of RBI''squarterly review of monetary policy on January 25.

The Reserve Bank has already raised the short-term keyborrowing and lending rates six times in 2010 in a bid toraise cost of funds and check inflationary expectations.

Although the RBI action pushed up the lending anddeposit rates of banks, the impact has not been profound incase of food inflation.

With food inflation continuing to rise, experts were ofthe opinion the central bank could hike key policy interestrates (repo and reverse-repo rates) by at least 25 basispoints in its monetary review later in the month.

Experts also feel that overall inflation for Decemberwould be over 8 per cent as compared to 7.48 per cent inNovember. The figures for December are scheduled to beannounced later this week.