Inflation recorded at minus 1.14 per cent for the week ending June 13 against (-)1.61 per cent in the previous week even as prices of food items like pulses, cereals, and fruit and vegetables increased compared to last year.
This is the second week in a row when inflation remained in negative territory.
The wholesale price index stood at 11.80 per cent during the corresponding week a year ago.
Low inflation is prompting banks to cut interest rates. On Thursday, State Bank of India reduced the benchmark lending rate by half a percentage point, leading to cheaper home, car and corporate loans.
During the week, tea became expensive by 2 per cent and arhar by 1 per cent.
At the same time, fuel items like aviation turbine fuel surged by a whopping 12 per cent, light diesel oil by 10 per cent and furnace oil by 3 per cent.