Inflation based on the wholesale price index fell to a four-month low of 3.39% in October from 3.57% in September, ANI reported on Tuesday. The drop was attributed to the fall in food prices, with food inflation declining to 4.34% in October from 5.75% the previous month, Business Standard reported.
However, pulses and potatoes continued to show high prices, even as their rates lowered compared to September. While potatoes had an inflation rate of 60.80% against 73.31% in the previous month, the rate of pulses declined to 21.58% from 23.99%. Fuel inflation rose to 6.18% from 5.58%. The inflation of manufactured products, which comprise almost 65% of the overall index, rose to 2.67% from 2.48%.
The fall in WPI inflation, along with the demonetisation of Rs 500 and Rs 1,000 currency notes, could allow the Reserve Bank of India to lower its policy rates during its December review. On October 4, the newly-formed Monetary Policy Committee had cut RBI’s repo rate – the rate at which it lends to commercial banks – by 25 basis points (or 0.25%) to 6.25%.