Inflation for the week ended October 20 fell to 3.02 per cent, close to the Reserve Bank's target of three per cent in the medium term.
The inflation rate stood at 3.07 per cent in the previous week and 5.61 per cent in the corresponding week last year.
This is the first official data on inflation after RBI announced its mid-term monetary review in which it raised cash reserve ratio by 50 basis points to suck out excess liquidity.
While retaining its forecast for inflation at five per cent this fiscal, RBI lowered its objective for the medium- term to three per cent against 4-4.5 per cent as announced in the last quarterly review in July.
During the week, prices of various items moved in a narrow range. While food items like maize, arhar, masur and wheat turned expensive, some others like fish marine, bajra and urad turned cheaper.
Among manufactured goods, chemicals and chemical product prices declined while most other items rose.