New Delhi, July 21: Finance minister P. Chidambaram today said the government is determined to keep inflation under control and prices are expected to come down in the next few days.

“There is some uncertainty over inflation but I hope this will get resolved in the next few days and weeks. Inflation will be kept under control both by the government and the RBI,” he told reporters.

He claimed that inflation has come down from 4.96 per cent to 4.68 per cent during the week ended July 8. “The rate of 4.68 per cent is tolerable inflation. There is no reason for inflationary expectations,” he said.

“Prices will be moderate. As I have often said a country that is witnessing 8 per cent growth rate for the third year in succession is bound to have some inflation. But that does not justify any heightened inflationary expectations,” he said. There is no need to assume that prices will rise relentlessly, he remarked.

There is ample liquidity in the market but interest rates are rising due to inflationary expectations, he said, adding that “moderate inflation would keep the interest rates moderate and prices are expected to fall more in the coming days and weeks”.

The RBI’s quarterly review of the monetary policy is scheduled to be announced on July 25, and more measures are expected to suck out liquidity from the economy may lead to higher interest rates and lowering of prices.

Rate watch

The rate of inflation declined to 4.68 per cent for the week ended July 8 from 4.96 per cent in the previous week mainly due to cheaper fruits, vegetables, pulses and milk. The wholesale price-based inflation was at 4.46 per cent during the corresponding week last year. The government revised upward the final inflation figure to 4.63 per cent for the week ended May 13.