India wholesale inflation tumbles to five-year low

A vendor works at his vegetable stall at a wholesale fruit and vegetable market in Mumbai.

A vendor works at his vegetable stall at a wholesale fruit and vegetable market in Mumbai.

NEW DELHI: India posted better inflation data for a second straight day, stirring hopes it is making headway in taming prices and will be able to cut interest rates to spur a sluggish economy.

Wholesale inflation slowed to a five-year low of 2.38 percent last month, its weakest since October 2009, commerce ministry data showed.

The encouraging figures came a day after the release of figures showing that the more widely tracked consumer price inflation fell to 6.46 percent in September.

The bank, which kept its trend-setting lending rate on hold at a steep eight percent last week, has set a goal of whittling down consumer inflation to six percent by January 2016.

Capital Economics Asia economist Mark Williams said a rate reduction could come late this calendar year if inflation news remained positive.

 
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