Indian inflation at 11.89 percent

NEW DELHI, July 11, 2008 (AFP) - India's annual inflation rate rose to 11.

89 percent as the price of manufactured goods, food and fuel increased, according to the latest government data on Friday.




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The figure for the week ended June 28 was up from 11.63 percent for the previous week, according to the Wholesale Price Index, India's most closely watched cost of living monitor.

The rise was close to or slightly higher than that expected by analysts, who had predicted a rate of around 11.

7 percent.

"It factors in the second-round impact of the fuel price hike," said Rupa Rege Nitsure, chief economist with Bank of Baroda.

India's government raised state-set fuel prices for the second time in a year on June 4 to stem huge losses at state-run oil firms.

"Going ahead, we expect the (central bank) to be aggressive in its monetary tightening," she said.

Nitsure added she expected the bank to raise the repo rate -- its key short term lending rate currently at 8.

5 percent -- by 50 basis points at its next meeting on July 29.

The cash reserve ratio, or the amount of cash banks must hold in reserve, was also expected to be raised by 50 basis points.

"Food and edible oil prices