Fall in inflation due to monetary steps: FM

Finance Minister P Chidambaram attributed on Friday the fall in wholesale prices-based inflation to steps taken on the monetary front and said the government will continue to monitor the price-situation.

"Inflation is down because we have taken steps on monetary side. We will continue to watch inflation," he told reporters.

Inflation rate fell to five-year low of 3.02 per cent for the week ended October 20.

He said consumer prices-based inflation was also down by 80 basis points in September over the previous month. The point-to-point rate of inflation, based on the CPI-IW, has decreased from 7.26 per cent in August to 6.40 per cent in September.

This was the first official data on inflation after the RBI announced its mid-term credit review on October 30, in which the central bank hiked by 0.5 per cent, the percentage of cash that banks need to keep with it to tighten liquidity
conditions.

The finance minister refused to comment on rising global oil prices. "I have no comments on oil issue," he said.

Though inflation is down, RBI said rising international oil prices could push it up.

As the oil prices went up over $90 a barrel on Thursday, Petroleum Minister Murli Deora met the finance minister to look for options to address the issue of its impact on margins of domestic oil companies.