Indian inflation down at five-year low of 3.07 pc
Sunday, 21 October 2007
NEW DELHI, Oct 20 (PTI): Cheaper fruits and vegetables and some manufactured items pulled inflation to a five-year low of 3.07 percent for the week ended October 6, but analysts said it would not trigger a return to soft monetary policy.
The wholesale price-based index stood at 3.07 percent in the previous week and 5.36 percent in the corresponding week last year.
Inflation has been way below RBI's projection of 5 percent for this fiscal and even its target of 4-4.5 per cent in the medium term. However, downward risks to inflation remains because of high global oil prices, RBI has said.
Global crude oil prices are ruling around a record high of USD 88 a barrel.
The fall in inflation rate has fuelled expectations that Reserve Bank could reduce interest rates in its half-yearly monetary review on October 30.
Hike in the Cash Reserve Ratio (CRR) would not come immediately in the wake of capital outflow in the past 3-4 days, he added.
During the week, fruits and vegetable prices dipped by 4 percent, eggs and fish-marine fell marginally by 1 per cent, while bajra and maize declined by 2 percent each. Among manufactured items, prices of oil cakes and gur declined also declined marginally by 1 percent each.
Prices of cotton yarn cones and other cotton yarn fell by 2 percent, benzene got cheaper by 10 percent and purified terephthalic acid by dipped 6 percent.
Even electrolytic capacitor prices fell by 48 percent, ingots were cheaper by 8 percent, other steel went down by two per cent and steel sheets by one percent.
However, prices of furnaces shot up by 46 percent followed by aviation turbine fuel which rose by 5 percent.
Prices of railway sleepers and broad-gauged diesel locomotive also jumped by 10 percent and 9 percent respectively.
Meanwhile, festival demand pushed up the prices of decorative laminates by 7 percent.
The inflation rate, which had crossed 6 percent earlier this year, has been brought under control partly by the measures taken by the Reserve Bank and the government through hike in interest rates and cut in customs duties on various food articles.
Analysts said the appreciation of rupee, which has touched nine-year high of 39.36 to a dollar, has also dampened the inflation rate through lowering of prices of imported agricultural and manufactured products.
The wholesale price-based index stood at 3.07 percent in the previous week and 5.36 percent in the corresponding week last year.
Inflation has been way below RBI's projection of 5 percent for this fiscal and even its target of 4-4.5 per cent in the medium term. However, downward risks to inflation remains because of high global oil prices, RBI has said.
Global crude oil prices are ruling around a record high of USD 88 a barrel.
The fall in inflation rate has fuelled expectations that Reserve Bank could reduce interest rates in its half-yearly monetary review on October 30.
Hike in the Cash Reserve Ratio (CRR) would not come immediately in the wake of capital outflow in the past 3-4 days, he added.
During the week, fruits and vegetable prices dipped by 4 percent, eggs and fish-marine fell marginally by 1 per cent, while bajra and maize declined by 2 percent each. Among manufactured items, prices of oil cakes and gur declined also declined marginally by 1 percent each.
Prices of cotton yarn cones and other cotton yarn fell by 2 percent, benzene got cheaper by 10 percent and purified terephthalic acid by dipped 6 percent.
Even electrolytic capacitor prices fell by 48 percent, ingots were cheaper by 8 percent, other steel went down by two per cent and steel sheets by one percent.
However, prices of furnaces shot up by 46 percent followed by aviation turbine fuel which rose by 5 percent.
Prices of railway sleepers and broad-gauged diesel locomotive also jumped by 10 percent and 9 percent respectively.
Meanwhile, festival demand pushed up the prices of decorative laminates by 7 percent.
The inflation rate, which had crossed 6 percent earlier this year, has been brought under control partly by the measures taken by the Reserve Bank and the government through hike in interest rates and cut in customs duties on various food articles.
Analysts said the appreciation of rupee, which has touched nine-year high of 39.36 to a dollar, has also dampened the inflation rate through lowering of prices of imported agricultural and manufactured products.