Costlier food items push inflation to 0.61 pc

Driven by the rising prices of essential food items like cereals, tea, spices and fruit and vegetables, inflation inched up to 0.61 per cent for the week ended 9th May.

Besides, the manufactured goods like sugar, gur, imported edible oil, steel ingots and synthetic yarn too became dearer during the week which witnessed inflation move by 0.13 per

cent from 0.48 per cent in the previous week.

The rate of price rise a year ago, however, was as high as 8.57 per cent.

This is the 10th week in a row when inflation stood below the one per cent mark indicating softer instance towards interest rate.

Many banks have already lowered their interest rates in response to softer monetary stance. Going forward rates could further come down if inflation remains below two per cent.

"There is room for for cutting rates if inflation remains low during the year," said PNB Chairman and Managing

Director K C Chakrabarty.

According to economic think-tank Centre for Monitoring Indian Economy (CMIE), the average inflation during 2009-10 is projected to remain negligible at just 0.1 per cent as against 8.3 per cent in 2008-09.