The Reserve Bank today said it is vigilant to the possibility of persistent high inflation and will do everything to prevent such an occurrence. RBI governor D. Subbarao told analysts in a tele-conferencing today that the approach to prevent overheating in the economy is to act on the supply side.Deputy governor Subir Gokarn said the apex bank has three challenges this year, supporting growth, containing inflation and managing government borrowings without hurting the private sector needs.Yesterday, the central bank moderately raised its key short-term rates as also the mandatory cash reserves that banks maintain with it by 25 basis points each to tame inflation.