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Indian inflation up to 3.75-pct; warnings on money supply

NEW DELHI, Dec 14, 2007 (AFP) - India's annual inflation rate jumped unexpectedly nearly three-quarters of a point to 3.75 percent on rising fuel and food prices, official data on Friday showed.
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Inflation rose to 3.75 percent for the week ended December 1 from 3.
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01 percent the previous week, according to the wholesale price index, India's most watched cost-of-living monitor.

The rise was driven by a 16 percent hike in aviation fuel, price hikes in other fuels as well as smaller increases in some food items. Annual inflation stood at 5.56 percent a year ago.

Inflation has fluctuated in recent weeks but is still well below the central bank's target of close to five percent for the fiscal year to March 31, 2008.
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"Although there is no hike in domestic fuel prices, the inflation is expected to rise in coming months due to a continuous rise in money supply which is currently at above 23 percent," India's Institute of Economic Growth said in a report.

But the sharp week-on-rise has left economists sticking by their forecast of no swift cut in interest rates as the central bank fears high global oil prices could trigger a rise in state-set domestic fuel prices and is concerned about

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