Inflation rate fell to 3.02 per cent, a new low in five years, closer to the Reserve Bank’s three per cent target for the medium term. 

The drop in inflation could be gauged from the fact that it was 5.61 per cent in the corresponding week a year ago. In the previous week, it stood at 3.07 per cent.

This is the first official figure on wholesale prices-based inflation after Reserve Bank of India announced its mid-term credit review on October 30, in which it asked banks to keep 0.5 per cent more cash with the central bank to tighten excess money supply in the system.

During the week, prices of various items moved in a narrow range. In fact, in most groups, the price index moved up. This implies prices did move up, although at a slower pace. Among manufactured goods, prices of chemicals and chemical product declined while most other items rose.