Inflation at 2-yr high of 6.58% on food price spikeOur Web Bureau / Mumbai February 9, 2007The annual rate of inflation shot up to a two-year high of 6.58% on the back of increased prices of food items like vegetables, milk, moong, arhar, chicken and meat during the week ended January 27.Wholesale price-based inflation rose to this new level, from 6.11% in the previous week. For the same week last year, inflation stood at 4.04%. Significantly, the government once again revised upwards the inflation estimate to 5.36%, compared to the provisional 5.16%, for the week ended December 2.Minister of state for finance P K Bansal and RBI deputy governor Rakesh Mohan today reiterated that, if required, more steps would be taken to stem prices. In the last week of January, government reduced customs duty on key manufactured items like steel and cement, while the central bank raised the short term lending rate by 25 basis points.The options available include the government moving to reduce duties on food items, while the RBI can either raise interest rates or increase the cash reserve ratio (CRR), the amount of cash that banks have to park with the central bank.Reacting to the data, Planning Commission deputy chairman Montek Singh Ahluwalia said:
