Decline in prices of food and some manufactured items pulled inflation based on the the wholesale price index (WPI) below 3% to 2.97% for the first time in more than 5 years.The inflation rate for the week ended October 27 is well below the Reserve Bank of India's new medium term target of 3% and current fiscal range of 4.5-5%.Inflation in the previous week was 3.02%. The index stood at 5.35% during the corresponding week a year ago.During the week under review, prices of fruit and vegetables and moong declined by 3%, while fish marine, poultry chicken was dearer by 2% each and wheat, milk and eggs became expensive by 1%.Among manufactured items, prices of gur, paper and paper products and lead ingots declined, while products like atta, maida, imported edible oils and dry cells got dearer.In January, this year, inflation had risen to a two-year high of 6.69%, but softened after the RBI tightened monetary policy and the government cut duties on a number of items to cool prices.In order to suck out excess cash from the market, the lead bank further raised cash reserve ratio by 0.5% to 7.5% in its half-yearly review in October 2007.
