Indian inflation falls to 16 months low

India's annual inflation has fallen to a 16-month low helped by lower food prices, data on Friday showed, fuelling expectations that the central bank will loosen its monetary policy.
The wholesale price index, India's closest watched cost-of-living monitor, showed annual inflation slowed to a lower-than-expected 3.79 percent for the week ended August 25, down from 3.94 per cent a week earlier.
"Some relaxation of the tight monetary stance" by the central bank "makes some sense as inflation is hovering below four percent," said economist Shashank Bhede at the National Council for Applied Economic Research, India's top economic research think-tank.
"It is only a question of timing now," Bhede said.
The latest official data showing inflation below four percent for a second straight week came as welcome news to India's Congress-led government as inflation has emerged as a major political issue because of the burden it imposes on the nation's millions of poor households.
Annual inflation stood at 5.27 percent during the corresponding week earlier a year ago.