India says falling oil prices should ease inflation

NEW DELHI, Nov 21 (Reuters): A decline in international crude oil prices will help control India's inflationary pressures going forward, the country's finance ministry said in a report on Tuesday.

India's retail inflation eased in October to a four-month low of 4.87 per cent, edging closer to the central bank's target of 4 per cent.

India's crude oil basket has averaged $83.93 a barrel in November so far, compared with $90.08 a barrel in October, government data shows.

"The decline in international crude oil prices and continued moderation in core inflation are likely to control inflationary pressures going forward," the monthly economic report said.

It said core inflation, which strips out volatile food and energy prices, fell to 4.3 per cent in October from 4.5 per cent in September.

The monthly report said that the Reserve Bank of India, which has kept rates on pause for the fourth consecutive policy meeting, has indicated that any further tightening of monetary policy will only occur "if the situation warrants."

However, food inflation has remained elevated, worrying policy makers, and both finance ministry officials and RBI governor have highlighted risks from a spike in food prices.