January 12, 2011 8:36 AM

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PM to meet RBI Governor today to discuss possible monetary steps to check inflation

Amid rising food inflation, Prime Minister Manmohan Singh will hold discussions with Reserve Bank Governor D Subbarao today on the possibility of further monetary steps to check price rise. Dr Singh's meeting with Subbarao comes ahead of RBI's quarterly review of monetary policy on January 25. The Reserve Bank has already raised the short-term key borrowing and lending rates six times in 2010 in a bid to raise cost of funds and check inflationary expectations. Although the RBI action pushed up the lending and deposit rates of banks, the impact has not been profound in case of food inflation.Earlier, the Prime Minister discussed the price situation with senior ministers on Tuesday to find ways to tame food inflation which has crossed 18 per cent. The meeting was attended by Finance Minister Pranab Mukherjee, Home Minister P Chidambaram, Food and Agriculture Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia. AIR correspondent reports that the meeting came in the wake of food inflation rising to 18.32 per cent for the week ended 25th December, due to rise in prices of food items like Onion, Fruits, Milk, Eggs and Meat. Retail price of Onion continues to rule high at 55 to 60 rupees per kg in major parts of the country due to sluggish supply. Measures like Income Tax raids on traders, slashing import duty on Onion and tight monetary policy by the Reserve Bank have not helped ease the situation.

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