Inflation slips below 4 per cent

Continuing its southward journey, inflation fell further to 3.92% during the week ended February 7 from 4.39% a week earlier.

Earlier a Reuters poll predicted that the inflation rate was expected to have fallen to 4% at the start of February, its lowest since the end of 2007.

The median forecast of 12 analysts was for a rise of 4.01% in the wholesale price index in the 12 months to February 7, compared with 4.39% in the 12 months to January 31.

"We have already seen the food prices softening last week. We expect that trend to continue," said Sujan Hajra, economist at Anand Rathi, earlier.

The inflation rate fell from above 5% in the last week of January after the government cut retail fuel prices by up to 11%.

Inflation had raced into double digits last June after a rise is fuel prices, and peaked just below 13% in August.

The RBI expects the inflation to be below 3% by March 31, the end of the 2008/09 fiscal year, with some analysts expecting it to be even lower.