BANKING/FINANCE: Brace for higher inflation, warn economists.

from BUSINESS LINE, July 30, 2009 Thiruvananthapuram, July 29 - The Monetary Policy Review was a timely reminder that higher inflation may not be too far away, says Mr R. Venkataraman, Executive Director, India Infoline.

The central bank is clearly mindful of that, and made this point several times in the policy release. While near-term liquidity remains ample, the challenge is to rein in long-term interest rates by keeping inflationary expectations low.

The economic outlook is certainly improving as reflected in better corporate performance, optimistic business confidence surveys and rebound in the capital market.

On the other hand, the delayed and …