Rate hike expected with inflation at 7.3-pct in India

NEW DELHI, April 25, 2008 (AFP) – India’s inflation jumped again to a more than three-year high, according to data on Friday, days ahead of a key meeting of central bankers who are expected to tighten monetary policy further. Annual inflation accelerated nearly two-tenths of a percentage point to 7.33 percent for the week ended April 12, driven partly by higher food costs.

High inflation has become a central political issue in India with taming prices the key goal of the Congress-led government, which faces general elections within a year and a clutch of state polls in between.

India’s hundreds of millions of poor, whose support is vital at voting time, have been hit hardest by the inflation surge.

The latest jump, which comes amid soaring global commodity costs, was up from 7.14 percent the previous week according to the Wholesale Price Index, the most watched cost monitor.

The rise comes as economists predict further monetary tightening at the central bank’s annual policy meeting next Tuesday aimed at checking inflation.

Last week, the central bank told commercial banks to hike cash reserves to suck out excess money supply in a bid to cool inflation that has more than doubled in four months.