Sunday, January 23, 2011

Will Rising Prices Play the Party Pooper in 2011?

We have had rising prices on our mind and hurting our pockets the past few months.

The rising food prices have prompted a tighter monetary policy, at the expense of curbing growth.

Six rate hikes have not been able to curb the run away prices in 2010 and we are close to another hike in the coming week.

Food prices rose 15.5 year ending Jan 8.

Further tightening had already scared away some FII who had rushed in and taken the markets to a high in 2010.

The hope is that inflation will gradually subside in the coming quarters and calm nerves.

If that does not happen we could see the markets affected adversely.

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