INSTANT VIEW 3-Indian annual inflation at 7.33 pct on April 12

NEW DELHI, April 25 (Reuters) - India's wholesale price
index INWPI=ECI rose 7.33 percent in the 12 months to April
12, accelerating from the previous week's annual rise of 7.14
percent, government data showed on Friday.

The rate, the last to be released before a central bank
policy review next week, was slightly below a median forecast
of 7.38 percent in a Reuters poll of analysts.

For a long and short-term graph of WPI and key interest
rate moves, click on:
(www.reutersindia.net/Econ%20Indicators.htm)
---------------------------------------------------------------
- KEY POINTS:
SUB-INDEX (WEIGHTING) Apr 12 Apr 5 Pct
change
PRIMARY ARTICLES (22.025) 237.1 236.0 +0.5
Food articles (15.402) 228.6 228.5 --
Non-Food articles (6.138) 227.3 226.4 +0.4
Minerals (0.485) 630.2 595.8 +5.8
FUEL, POWER, LIGHT (14.226) 342.1 342.0 ---
AND LUBRICANTS
MANUFACTURED PRODUCTS (63.749) 197.6 197.6 0.0
Food Products (11.538) 203.2 203.1 +0.05
----------------------------------------------------------------

Note: Articles in CAPITALS are sub-indexes. Articles in lower
case are specific categories within the sub-indexes.
---------------------------------------------------------------
-
- Annual inflation for the week ended Feb 16 was revised to
5.66 percent from 4.89 percent.
- The annual inflation rate was 6.34 percent during the
corresponding week of the previous year.
- The wholesale price index stood at 226.9 points in the week
ended April 12.
COMMENTARY:

SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI: "We do
expect in this quarter ending June the inflation to be close to
7 percent. Once the impact of fiscal measures plays out, we
could see inflation drift lower. It will remain a challenge to
bring inflation below 6.5 percent."

GAURAV KAPUR, SENIOR ECONOMIST, ABN AMRO BANK, MUMBAI:

"Inflation could continue to hold between 7- 7.5 percent
range over the next month. Moreover, the magnitude of revisions
to past data indicate that the actual level of headline
inflation could be 40-50 bps higher. Given that strong
inflationary pressures are persisting, the recent CRR hike will
not be enough to bring down inflation closer to the RBI comfort
level. Thus we expect the RBI to hike at least the repo rate by
25 bps."
NAMRATA PADHYE, ECONOMIST AT IDBI GILTS, MUMBAI:

"Inflation is going to remain at an elevated level in the
coming months. The impact of all these fiscal and monetary
measures will start feeding in at the earliest in
July-September. We have to see a significant easing in global
commodity and food prices for inflation to come down quickly."

"We expect an increase in the repo rate by 25 basis points
in the policy next week."

SONAL VARMA, ECONOMIST, LEHMAN BROTHERS, MUMBAI:

"There has been some moderation in the pace of weekly rise
in the WPI index, suggesting that some of the trade and
supply-side measures taken by the government could be beginning
to have an effect. Going forward, we expect inflation rate to
remain in the 7.0-7.5 percent range in the coming weeks. In the
April 29 policy, we expect the RBI to keep all rates unchanged,
largely because of slowing growth."

D.K. JOSHI, PRINCIPAL ECONOMIST, CRISIL, MUMBAI:

"I don't see a significant role for the monetary policy in
controlling inflation. RBI has already taken steps to suck
liquidity which was to hike the CRR, now the responsibility
lies to ensure adequate supply."

"Regarding supplies, food production, essentially wheat
arrival numbers, have been very encouraging and the monsoon is
expected to be normal and well distributed. There can be no
better news than domestic production doing well"

"In coming months, we will see inflation close to 7
percent."

SHUCHITA MEHTA, ECONOMIST, STANDARD CHARTERED BANK, MUMBAI:

"We believe inflation is going to be a cause for concern
and we will continue to see it rise, but pace of acceleration
may moderate due to the steps taken by the RBI."

"Inflation continues to rise and RBI will be hawkish, but
perhaps it can wait before taking any steps."

ABHEEK BARUA, ECONOMIST, HDFC BANK, NEW DELHI:

"I think the bottom line is that we're still not seeing the
impact of the fiscal measures. Or the fiscal measures have not
been adequate. The implication is that the RBI will not be able
to relax its vigilance on inflation. Perhaps some more measures
are due in the April 29 policy. It strengthens the case for
monetary tightening."

"(It) would take form of repo rate hike combined with some
selective credit controls, which would reduce the quantum of
leverage in the commodity sector and also prevent things like
hoarding."
MARKET REACTION:

The 8.24 percent bond maturing in 2018 IN082418G=CC was
unchanged at 8.18 percent from before the release of the data.

The partially convertible rupee INR=IN was at 40.17/18
per dollar, unchanged from before the data.
LINKS: Ministry of Commerce and Industry Web site at:
www.eaindustry.nic.in
BACKGROUND:

- Annual inflation reached 7.41 percent on March 29, its
highest in more than three years.

- Last week, the central bank announced a 50 basis point
increase in the cash reserve ratio (CRR) to take effect in two
stages. It said the move would suck 185 billion rupees ($4.6
billion) of surplus cash from the banking system.

- The RBI next reviews monetary policy on April 29 and
markets and analysts are divided whether the central bank will
act again to rein in inflation. RBI governor Y.V. Reddy has
said inflation was unacceptably high.

- The finance minister said on Tuesday the government
would consider more export curbs and fiscal moves to tackle
rising inflation if necessary. Steps already taken would calm
price pressures, he said, but it would be some time before the
impact was felt.

- The government has withdrawn export incentives on steel
and cement, and banned cement exports to increase local
supplies. It has also scrapped import duties on most edible
oils and banned exports of non-basmati rice.

- The central bank aimed to contain inflation close to 5.0
percent in 2007/08 (April-March). It wants to condition
expectations in the range of 4.0-4.5 percent with an inflation
rate of around 3.0 percent as a medium-term goal.

- The wholesale price index is more closely watched than
the consumer price index (CPI) because it has a higher number
of products in its basket and is published weekly.
(Additional reporting by V. Ramakrishnan, Anurag Joshi,
Catherine Bosley and Saikat Chatterjee in MUMBAI and Surojit
Gupta in New Delhi)
(Reporting by Rajkumar Ray; Editing by John Mair)