Inflation fell for the fourth straight week to 8.40 per cent on cheaper food and fuel prices, giving the Reserve Bank room for deeper rate cuts -- possibly on Saturday when the government is set to unveil a stimulus package for the economy.
The inflation, measured by movement in the wholesale prices, went down by 0.44 per cent for the week ended November 22 from 8.84 per cent recorded during the previous week. It was 3.11 per cent in the year-ago period. Following a sharp decline in crude oil prices in the international market, prices of various petroleum products, including furnace oil and jet fuel, which are not regulated by the government, came down significantly during the week. Among other commodities, steel products, telephone instruments and certain food items like maize and tea became cheaper pulling down the rate of price rise. The RBI and the government are expected to announce on Saturday a host of measures to inject additional liquidity and reduce taxes on Saturday to fuel economic growth.
