Inflation rate slipped for the third week in a row to 8.84 per cent for the the week ended November 15 raising the hopes for further cut in key policy rates by Reserve Bank.
The inflation declined by 0.06 per cent from the previous week on account of decline prices of metals, fruits and some manufactured items such as imported edible oil and rubber. The inflation, measured by rise in wholesale prices, was 3.35 per cent during the corresponding period a year ago. While the prices of fruits and sea fish declined during the week, the index of 'fuel, power, light and lubricants' remained unchanged during the week. Among the food items, prices of moong, rice and vegetables firmed up during the week. The prices of items in the textile group and some chemicals items, too, became expensive. RBI, which has injected Rs 2,75,000 crore (Rs 2,750 billion) since October through various policy instruments such as cut in mandatory deposits that banks keep with the central bank and reduction of funds that banks park in government securities. In addition, it has also reduced the short-term (repo) lending rates signalling soft interest rate regime. The industry as well as the banks are demanding further cut in key rates to fuel growth and declining inflation may prompt the RBI to further ease monetary policy to arrest economic slowdown.
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