Inflation rate slumps to 3.52 per cent

New Delhi, Sep 16: Decline in mineral costs and lower prices of aviation turbine fuel (ATF) and furnace oil dragged inflation to 3.52 per cent for the week ended September 1, raising expectations of a softening monetary policy stance by the central bank.

The wholesale price index based inflation, which stood at 3.79 per cent for the week ended August 25, has remained below four per cent for the third week in a row and is much lower than 5.34 per cent during the corresponding week of last year.

''The Reserve Bank is more vigilant than ever in checking inflation without choking growth - an uphill task that has been compounded by heightened global financial uncertainties and rising prices of crude oil and farm produce,'' Governor Y V Reddy said.

The policy challenge for RBI now, is to manage the current transition to a higher growth path while containing inflationary pressures and focusing on financial stability, he said, while addressing bankers in Mexico.

''The policy preference for the period ahead is strongly in favour of price stability and to contain inflation close to five per cent in 2007-08 and to the range of 4 to 4.5 per cent over the medium term,'' Mr Reddy said.

The Wholesale Price Index (WPI) for all commodities for the week ended September 1 rose by 0.4 per cent to 214.4 from 213.6 for the previous week.

The index for 'Primary Food Articles' rose by 1.3 per cent to 227.5 from 224.5 for the previous week.

The index for the 'Food Articles' group rose by two per cent to 227.7 (Provisional) from 223.3 for the previous week due to higher prices of fish-marine (nine per cent), fruits and vegetables (eight per cent) and ragi and milk (one per cent each).

However, the prices of bajra and eggs (three per cent each), maize (two per cent) and moong and condiments and spices (one per cent each) declined.

The index for 'Non-Food Articles' group rose by 0.2 per cent to 210.4 (Provisional) from 209.9 (Provisional) for the previous week due to higher prices of coir fibre (17 per cent), raw rubber (nine per cent), safflower (karbi seed) (seven per cent), castor seed (two per cent) and raw jute (one per cent).

However, the prices of raw wool (four per cent) and raw tobacco, raw cotton and copra (one per cent) declined.

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

The index for Minerals group declined by 2.4 per cent to 437.6 (Provisional) from 448.3 (Provisional) for the previous week due to lower prices of manganese ore (26 per cent), ochre (19 per cent), vermiculite (eight per cent), fire clay (six per cent) and iron ore and steatite (two per cent each). The index for Manufactured Products group rose by 0.2 per cent to 185.9 (Provisional) from 185.6 (Provisional) for the previous week.

The index for 'Food Products' group rose by 0.1 per cent to 186.7 (Provisional) from 186.6 (Provisional) for the previous week due to higher prices of maida (two per cent) and sooji (rawa), coconut oil and khandsari (one per cent each).

However, the prices of cotton seed oil (five per cent) and rice bran oil and imported edible oil (one per cent each) declined.

The index for Beverages Tobacco and Tobacco Products group rose by 0.2 per cent to 265.1 (Provisional) from 264.7 (Provisional) for the previous week due to higher prices of Indian made foreign spirit (one per cent each).

The index for 'Chemicals and Chemicals Products' group rose marginally to 202.2 (Provisional) from 202.1 (Provisional) for the previous week due to higher prices of oxygen (six per cent), bopp film (three per cent), liquid chlorine (two per cent) and acid (all kinds) (one per cent).

However, the prices of zinc ingots (one per cent) declined.

The index for 'Basic Metals Alloys amd Metal Products' group rose by 0.3 per cent to 244.1 (provisional) from 243.4 (provisional) for the previous week due to higher prices of lead ingots (six per cent), basic pig iron and foundary pig iron (four per cent each), steel sheets, plates and strips (two per cent), and other other iron steel (one per cent) declined.

However, the prices of zinc ingots (one per cent) declined.

The index of Transport Equipment and Parts group rose by 0.1 per cent to 164.9 (Provisional) from 164.7 (Provisional) for the previous week due to higher prices of motorcycles (three per cent). UNI