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Inflation at 3.92% for week ended Feb 7

February 19, 2009

Inflation continues its downward journey as the wholesale price index (WPI) for all commodities fell by 0.2% to 228 on weekly basis for the week ended February 7.

Growth in WPI on annual basis stood at 3.92% in the said week compared with 4.39% in the previous week. Faster than expected decline in inflation has raised hopes for further cut in policy or reserve rates by the Reserve Bank of India. However, the monetary authority may decide to wait to see the impact of earlier cuts and fiscal stimuli measures taken by government of India in wake of soaring fiscal deficit.

RBI will also probably like to finalise the way through which it will arrange additional borrowings of Rs 45,000 crore which have not been mentioned in the borrowing calendar released with the interim budget.

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