As inflation crossed the 5.5 per cent mark, Finance Minister P Chidambaram said on Friday it is a concern, but within 'expectations'.

"Inflation is a concern...(But) like RBI stated previously inflation is in accordance to our expectations. We continue to monitor it and continue to take all possible steps be it on monetary or fiscal side," he told reporters on the sidelines of a fuction of Indian Oil Corporation's refinery in Panipat, Uttar Pradesh.

As per the government estimates on Friday, inflation touched 5.58 per cent for the week ended December 30, crossing the upper limit of RBI's target of 5.5 per cent for this fiscal.

He said inflation was triggered by supply side constraints. "But things have eased now. Sugar prices have stablised, but wheat continues to be sticky," he added.

Chidambaram expressed hope that wheat prices would also moderate with the new crop coming in.

The finance minister also said liquidity situation was more or less comfortable but demand was very high. However, he refused to answer queries on tax proposals being considered on the budget for 2007-08.