India inflation eases to 10.68 percent

MUMBAI, India - Falling commodities prices continued to cool India's inflation, which has been running near 13-year highs, the Ministry of Commerce said Thursday.

The wholesale price index — India's most-watched inflation measure — dipped to 10.68 percent for the week ended Oct. 18, down from 11.07 percent for the prior week. The cost of rubber, cotton, furnace oil, and diesel fell.

Though inflation has been moderating since August, it remains high by historical standards. This time last year, it was just 3.11 percent.

Business groups have been pushing India's central bank to cut interest rates further to stimulate economic growth, but the Reserve Bank of India says inflation remains a real concern in determining monetary policy.

In its quarterly policy review last week, the bank noted that consumer prices for agricultural and rural laborers hit double digits in August and September, the first time in nearly a decade.

"We cannot afford to let the guard slip on our inflation vigil," the bank said, adding that it aims to get inflation under 5 percent as quickly as possible.

While falling crude prices have been a boon to India, which imports about three-quarters of its oil, their effect on consumer costs is muted because the government subsidizes prices at the pump.

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