Inflation at 15-month low of 3.36%

Inflation declined to about a 15-month low of 3.36 per cent mainly due to fall in the prices food articles like fruit and vegetables, pulses, and some manufactured items, raising hopes of cuts in the key policy rates by the RBI.

Wholesale price based inflation declined by 0.56 percentage points during the week ended February 14 against 3.92 per cent in the previous week.

Yesterday, the government expressed confidence that the RBI may ease money supply further.

Replying to the debate on the interim Budget in the Rajya Sabha, Finance Minister Pranab Mukherjee said, "I am fully concerned that increased public spending may put pressure on the government's borrowing programme and overall credit offtake in the economy."

Mukherjee said: "There is, however, scope for appropriate compensatory monetary policy options, (which) I am sure will be exercised by the RBI at the right time."

Inflation based on the wholesale-price-index dropped to 3.36 per cent for the week ended February 2009 as against 3.92 per cent the week before.