New Delhi, Continuing the declining trend, inflation fell for the third consecutive week to over a five-month low of 8.84 per cent, providing room to RBI to signal cut in interest rates to spur economic growth amid fears of moderation.
Inflation fell by 0.06 percentage points, during the week ended November 15, from 8.90 per cent a week ago, even as many food and manufactured product prices rose.

However, some manufactured products such as imported edible oils, rubber, metals like iron and steel, and some primary food articles like fruits, sea-fish and tea turned cheaper, while fuel products' prices remained unchanged.

The decline in inflation may prompt RBI to cut policy rates or reserve ratios as demanded by bankers to enable them to cut interest rates to give a fillip to growth rates.

The data for economic growth during the second quarter of this fiscal is slated for tomorrow amid fears of slowdown.

Today, leading housing finance firm HDFC Chairman Deepak Parekh ruled out cut in interest rates unless the cost of funds declines further. "The cost of funds is still high, so once it comes down, we will reduce interest rates," he said.

Earlier, ICICI Bank CEO and MD K V Kamath had demanded that the RBI should ease money supply further to enable cut in interest rates by 200-300 basis points.

"The RBI now has enough room for a rate cut. Within this calendar year, I expect a 50 basis point cut in the repo rate and reserve repo rate. The slashing of the CRR will depend on how the liquidity situation emerges in the coming days," Crisil Principal Economist D K Joshi said.

Some economists also described the fall in inflation as still higher than expectation.

"It is slightly higher than our expectation but it could reach 7-7.5 per cent by the end of January," said HDFC Bank Chief Economist Abheek Barua.

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