New Delhi, Dec. 4: Inflation dropped to a seven-month low of 8.4 per cent for the week ended November 22 on the back of cheaper food and fuel prices, providing leeway to the Reserve Bank of India to undertake steeper rate cuts.
Inflation was 8.84 per cent in the previous week and 3.11 per cent in the year-ago period.
The RBI would have cut rates in any case, but the drop in inflation would provide more comfort, said D.K. Joshi, principal economist with rating agency Crisil. The prices of petroleum products, including furnace oil and jet fuel, came down significantly this week following a sharp slide in the price of global crude oil. Steel products, telephone instruments and food items such as maize and tea have become cheaper.