Annual inflation in India stayed stubbornly high

Annual inflation in India stayed stubbornly high at 9.11 percent in November, down marginally from 9.73 percent the month before, government data showed on Wednesday.The closely-watched Wholesale Price Index has been close to double figures for months, heaping pressure on the government and the central bank, which has aggressively raised interest rates to no avail.Revised data for September showed inflation had broken into double figures, reaching 10.0 percent.The sustained high level of inflation, which has been a major policy concern for us in the last two years, is now beginning to moderate, Finance Minister Pranab Mukherjee said Wednesday.Indian policymakers must now shift their focus from battling inflation to reviving economic growth, which fell to 6.9 percent in the July-September quarter, he said.D.K. Joshi, chief economist with Indian ratings firm Crisil, told AFP the fall in November inflation would not be enough for the central bank to start cutting lending rates to spur activity.Policymakers from the Reserve Bank of India meet in financial hub Mumbai on Friday, with analysts and economists expecting them to hold rates.People were expecting a sharper drop (in inflation). That hasnt happened, he said. My sense is that the weakening of the currency is now beginning to show in inflation. The pressure on inflation continues.The rupee this week touched record lows against the dollar, as investors continue to opt for the safe-haven of the US currency amid uncertainty over the eurozone debt crisis.The sharp fall in the local currency has made imports more costly, adding to inflation.On Wednesday, the rupee lost 57 paise in early trade, dropping to a fresh record low of 53.80 against the dollar.Business leaders have long been calling for a pause in interest rate rises due to concern about their impact on growth and investor confidence.The director-general of trade body the Confederation of Indian Industry, Chandrajit Banerjee, welcomed the fall in inflation and said it should spur a softening in the central banks monetary policy stance.CII hopes that the RBI will now shift its focus to encouraging growth rather than controlling inflation, given that industrial production has now begun to contract and the investment scenario remains bleak, he said.The RBI should reduce interest rates to gradually reverse the impact of the 13 interest rate hikes it has undertaken over the last two years, he added, also calling for intervention to halt the fall of the rupee.