Cheaper primary articles brings down inflation to 4.05 %

New Delhi, Aug 17 (UNI) Cheaper primary articles further brought down inflation rate to 4.05 per cent for the week ended August 4, from 4.45 per cent previous week.

The annual inflation rate was 5.08 per cent during the corresponding week last year, an official statement said here today.

It is the ninth consecutive week that annual inflation has been below five per cent.

Inter-bank call money rates yesterday ended at 6.2 per cent, hovering at range bound margins. Reserve Bank of India (RBI), through its reverse repo operation, yesterday accepted an amount between Rs 25,000-30,000 crore at the Liquidity Adjustment Facility (LAF) window.

Call rates, which are hovering almost at stable levels of 6-6.25 per cent, after the recent hike in Cash Reserve Ratios (CRR) mooted by RBI is expected to go up to eight per cent levels by next month.

Last month, the Reserve Bank of India raised banks' CRR to seven per cent from 6.50 per cent in a bid to mop up excess cash that could fuel inflation. The RBI held its short-term lending rate steady at the monetary policy review, as expected, after raising it five times since mid-2006.

The Wholesale Price Index (WPI) for all commodities for the week ended August 4, 2007 declined by 0.1 per cent to 213.1 from 213.4 for the previous week.

The index for 'Primary Food Articles' declined by by 0.4 per cent to 222.5 from 223.4 for the previous week.

The index for the 'Food Articles' group declined by 0.7 per cent to 220.3 (Provisional) from 221.8 for the previous week due to lower prices of fruits and vegetables and poultry chicken (five per cent each ), ragi (three per cent), and moong and fish-marine (one per cent each).

However, the prices of tea (seven per cent), arhar (four per cent) and rice, milk and masur (one per cent each) moved up.

The index for 'Non-Food Articles' group rose by 0.3 per cent to 210.3 (Provisional) from 209.7 (Provisional) for the previous week due to higher prices of niger seed (22 per cent), skins (raw) (two per cent) and gingelly seed and groundnut seed (one per cent each).

However, the prices of fodder (six per cent) declined.

The index for 'Fuel, Power, Light and Lubricants' group rose by 0.1 per cent to 322.1 (Provisional) from 321.9 (Provisional) for the previous week due to higher prices of aviation turbine fuel (four per cent) and furnace oil (one per cent).

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