Monetary policy may not be effective in inflation fight

Trade Minister Anand Sharma said today day monetary policy may not be suitable to tackle high inflation in primary articles, especially in vegetables.

Trade Minister Anand Sharma said on Tuesday monetary policy may not be suitable to tackle high inflation in primary articles, especially in vegetables.

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In a letter written to Finance Minister Pranab Mukherjee, Sharma also said a selective restriction on credit may be necessary to check inflationary pressures.

Inflation rose an annual 8.43% in December on higher food prices, cementing expectations of a rate increase by the central bank next week to cool prices.

Beset by the highest inflation of any major Asian economy, the Reserve Bank of India is widely expected to raise key rates by at least 25 basis points in its Jan. 25 review to squeeze inflation to its projected level of 5.5% by March.