Inflation rate dips to a five-year low at 3.26 percent

Annual rate of inflation based on the wholesale price index (WPI) declined to 3.26 per cent - a five-year low - for the week ended September 29, compared to 3.42 per cent in the previous week.

The annual rate of inflation stood at 5.41 per cent during the comparable period a year-ago.

The decline in inflation is attributed to a fall in prices of pulses and some food articles. The prices of pulses like moong and urad declined by 1 per cent during the week. Besides, a fall in tea prices, which declined by 4 per cent and edible oils (0.1 per cent), also helped to bring down the inflation rate.

The prices of vegetables, however, rose by 0.6 per cent, and fruit and milk prices remained unchanged during the week.

The index of fuel, power, light and lubricants, which have a weight of 14.23 per cent in the WPI, remained unaltered at its previous week's level of 322.

Manufactured products, which have a weight of 63.75 per cent in WPI, rose marginally by 0.1 per cent during the week.

It would be the seventh straight week inflation has been below 4 per cent and the 17th week it has been under 5 per cent, the RBI's upper floor for the 2007-08 fiscal year.

Annual inflation rose to a two-year high of 6.69 per cent in January, but softened after the central bank tightened policy and the government cut duties on a slew of items to cool prices.

Source - domain-b