New Delhi: The Government can breath a bit easy as inflation fell for the second week in succession to close at 12.34% as on 23 August, as a result of a decline in prices of many food items including fruits and vegetables.

“There is movement downward,” said Commerce and Industry Minister Kamal Nath even as Prime Minister Manmohan Singh took a review of price and availability of food commodities at a meeting of Cabinet Committee on Prices (CCP).

The inflation, figures for which were released by the Government today evening, came down from 12.40% on 16 August amid the Finance Ministry’s assertion that the rate of price rise declined to 6.9% in 30 essential commodities from 7.24% during the period under review.

However, the Reserve Bank of India (RBI) did not show any complacency on the price front and indicated that it would continue with required monetary policy to bring down inflation to 7% by the end of current fiscal.

Inflation during the week ended 23 August came down as prices of fruits, vegetables, many pulses and fish marines declined. However, prices of imported edible oils and certain manufactured products like metals, transport equipment and chemicals continued to rise.

“The Government is trying to look at supply side stress,” Nath said. “We have taken some steps in the last couple of months. It appears to be taking effect. We do hope it will take effect in the next several weeks and months,” he added.

The RBI has been tightening money supply to rein in inflation, and the Government has been taking steps to augment supply side.

Earlier in the day, the double-digit inflation came up for review before the Cabinet Committee on Prices (CCP) amid floods in Bihar and their impact on prices of essential commodities.

Official sources said that the CCP was informed that despite floods in some states, the prices of food commodities have begun to show downward trend.