Cheaper primary article dips inflation to 4.05 pc

New Delhi, Aug 17: The headline inflation rate dipped to 4.05 per cent for the week ended August 4, from 4.45 per cent previous week on account of cheaper primary articles driven by a reduction in price of 'food articles'.

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 index for Manufactured Products group declined by 0.1 per cent to 185.6 (Provisional) from 185.7 (Provisional) for the previous week. The index for Food Products group declined by 0.1 per cent to 186.7 (Provisional) from 186.9 (Provisional) for the previous week due to lower prices bran (all kinds) (five per cent), imported edible oil (two per cent) and oil cakes, gingelly oil and sunflower oil (one per cent each).

However, the prices of sooji (rawa) (four per cent), maida (three per cent), atta(two per cent) and ghee (one per cent) moved up.

The index for Chemicals and Chemicals Products group declined marginally to 201.8 (Provisional) from 201.9 (Provisional) for the previous week due to lower prices of methanol (four per cent), bopp film (three per cent) and rubber chemicals (one per cent).

The index for 'Basic Metals Alloys and Metal Products' group declined by 0.3 per cent to 243.8 (provisional) from 244.5 (provisional) for the previous week due to lower prices of basic pig iron and foundry pig iron (four per cent each), ms bars and rounds and lead ingots (three per cent each) and zinc ingots and steel sheets, plates and strips (one per cent each).

The index for Machinery and Machine Toools group rose by 0.1 per cent to 165.9 (provisional) from 165.8 (provisional) for the previous week due to higher prices of batteries (two per cent).

The index for 'Paper and Paper Products' group rose by 0.2 per cent to 193.1 (Provisional) from 192.8 (Provisional) for the previous week due to higher prices of cream laid woven paper (two per cent) and map litho paper (one per cent).

UNI