DOUBLE-DIGIT inflation is here to stay for some more time, but could trend down in September. With prices of crucial commodities like steel likely to rise further, inflation is expected to stay over 11% before it peaks around September. It is estimated that steel and steel products (used in industries like auto, housing, white goods, capital goods etc) contribute almost 21% to inflation. Cement prices are expected to remain soft, thanks to capacity addition. Finance minister P Chidambaram admitted on Friday that double-digit inflation would continue for some more weeks and reiterated that the government as well as RBI would take steps to rein in soaring prices. Earlier this week, the central bank raised the cash reserve ratio (the proportion of bank deposits parked with RBI) to 8.75% and the repo rate (the rate at which RBI lends to banks) to 8.5% as part of monetary tightening to check inflation. Steel could be one of the immediate drivers of inflation as the voluntary moratorium on prices will come to an end in July. Chances of a government intervention, asking steel companies to hold onto prices, are slim. Steel minister Ram Vilas Paswan told reporters on Thursday: "The government cannot intervene every time as steel rates are governed by international prices.' Major steelmakers had reduced the prices of flat products by Rs 4,000 per tonne and those of rebars and structural steel by Rs 2,000 per tonne in May. They had also promised the government to hold their price line for three months till July. However, steel players have already hinted that rates may go up from August with raw material prices shooting up. Good harvest gives comfort on food front The railways, too, have announced hikes in freight rates of key commodities between July and September. Although a good harvest has given some comfort on the food front, with prices of major food articles like wheat and vegetables declining over the past few weeks, worries on crude oil continue. The government raised prices of fuel earlier this month, which led to a spurt in inflation rates. Rising global crude oil prices will continue to put pressure on domestic prices. The base effect, which has played a role in keeping the rate of inflation high, is also expected to wane by September. Inflation is measured as a change in the wholesale price index from its level a year ago. Last year, from February through September, the index remained virtually unchanged, registering low inflation during the period. However, those static price levels week after week last year have made the price level this year look exceptionally high. If the price level had risen sharply last year, the high base would have made the change in the price level this year seem lower. Since the price level resumed its normal pace of increase last September, this September onwards, the change in the price level would appear more subdued as well. Inflation peaked to a 13-year high last week at 11.05% and is expected to go up further when fresh figures (for the week ended June 14) are announced by the government on Friday. "I think we are peaking out on inflation. The figures are going to peak now. It is expected to go up by 0.3-0.4%,' commerce and industry minister Kamal Nath said. Addressing a press conference, he said while the government will continue to take measures to contain inflation, it cannot switch it off. Double-digit inflation is expected to continue till the end of August, he said. Mr Nath said while higher interest rates could affect credit offtake, they would not impact economic activity as they would lead to ''greater caution in borrowing and better financial management'. He added that high inflation would not affect growth. "Our exports have increased by 31.5% in April while FDI has gone up by a record 127% to $3.74 billion during the year. Our manufacturing sector is also performing well,' he said. We are peaking out on inflation. It is expected to go up by 0.3-0.4%. But higher interest rates will not impact economic activity K A M A L N AT H