NEW DELHI: Inflation fell to a one year-low of 4.28 per cent for the week ended June 9 on cheaper food and some manufactured goods as well as a higher base, easing pressure on RBI to raise borrowing costs at its quarterly review next month.
Finance Minister P Chidambaram attributed the fall in inflation to tight monetary measures taken by the Reserve Bank, but said it was too early to reach any conclusion on the price situation.
Inflation stood at 4.80 per cent in the previous week and 5.29 per cent in the corresponding week last year. This is the third straight week when the price index has remained below five per cent.
"It is as we have anticipated. Monetary tightening measures have had an impact," Chidambaram said.
However, he said the situation has to be watched over the next 4-5 months to reach any conclusion on price levels.
Inflation is slowly moving to RBI's target for the medium term. The central bank in its annual monetary policy released on April 24 had said it will contain inflation to close to five per cent in 2007-08 and moderate it to a much tolerable level of 4-4.5 per cent in the medium term.
With the wholesale price index (WPI) coming down to 4.28 per cent, the central bank may keep interest rates unchanged at its quarterly review next month-end.
Decline in inflation is mainly caused by 0.1 per cent decrease in the food articles group. Specifically, prices of moong, fish-marine, gram, wheat, maize, coconut oil, khandsari, gur and fruits and vegetables declined.
The prices of some food articles may come down in future as monsoon for the current year is projected to be normal, analysts said.
Prices of pulses declined by 0.8 per cent after the government decided to import 15 lakh tons through public sector agencies by December. Already, public sector agencies like MMTC, NAFED, and STC have contracted for 6.7 lakh tons of the food item, of which 1.9 lakh tonnes has arrived.
However, prices of condiments and spices, sunflower oil, groundnut oil and mustard oil firmed up.
Imported edible oil became dearer by 0.7 per cent due to hardening international prices of palm oil and soya oil.
Among manufactured items, prices of khandsari, coconut oil and soyabean oil declined by two per cent followed by one per cent dip in gur and gingelly oil.
Prices of hessian cloth, viscose filament yarn and complete engine declined by two per cent. Zinc became dearer by four per cent.
However, sunflower oil went up by six per cent, hydrogenated vanaspati by two per cent and imported edible oil and groundnut oil by one per cent.
Prices of paints jumped up by six per cent, while those of varnishes, purified telrephthalic acid and enamels were up four per cent.
Source : http://www.dnaindia.com/report.asp?newsid=1105166&pageid=2
Finance Minister P Chidambaram attributed the fall in inflation to tight monetary measures taken by the Reserve Bank, but said it was too early to reach any conclusion on the price situation.
Inflation stood at 4.80 per cent in the previous week and 5.29 per cent in the corresponding week last year. This is the third straight week when the price index has remained below five per cent.
"It is as we have anticipated. Monetary tightening measures have had an impact," Chidambaram said.
However, he said the situation has to be watched over the next 4-5 months to reach any conclusion on price levels.
Inflation is slowly moving to RBI's target for the medium term. The central bank in its annual monetary policy released on April 24 had said it will contain inflation to close to five per cent in 2007-08 and moderate it to a much tolerable level of 4-4.5 per cent in the medium term.
With the wholesale price index (WPI) coming down to 4.28 per cent, the central bank may keep interest rates unchanged at its quarterly review next month-end.
Decline in inflation is mainly caused by 0.1 per cent decrease in the food articles group. Specifically, prices of moong, fish-marine, gram, wheat, maize, coconut oil, khandsari, gur and fruits and vegetables declined.
The prices of some food articles may come down in future as monsoon for the current year is projected to be normal, analysts said.
Prices of pulses declined by 0.8 per cent after the government decided to import 15 lakh tons through public sector agencies by December. Already, public sector agencies like MMTC, NAFED, and STC have contracted for 6.7 lakh tons of the food item, of which 1.9 lakh tonnes has arrived.
However, prices of condiments and spices, sunflower oil, groundnut oil and mustard oil firmed up.
Imported edible oil became dearer by 0.7 per cent due to hardening international prices of palm oil and soya oil.
Among manufactured items, prices of khandsari, coconut oil and soyabean oil declined by two per cent followed by one per cent dip in gur and gingelly oil.
Prices of hessian cloth, viscose filament yarn and complete engine declined by two per cent. Zinc became dearer by four per cent.
However, sunflower oil went up by six per cent, hydrogenated vanaspati by two per cent and imported edible oil and groundnut oil by one per cent.
Prices of paints jumped up by six per cent, while those of varnishes, purified telrephthalic acid and enamels were up four per cent.
Source : http://www.dnaindia.com/report.asp?newsid=1105166&pageid=2