Mumbai: The annual rate of inflation based on the wholesale price index declined slightly to 3.65 per cent during the week ended December 8 from 3.75 per cent during the previous week, official data showed.

The inflation rate stood at 5.63 per cent during the corresponding week of the previous year.

During the week under review, food articles that comprise 15 per cent of the index fell 0.2 per cent, while manufactured products and fuel which account for nearly 80 per cent remained unchanged.

This was the 27th successive week that inflation was below 5 per cent, the Reserve Bank's target for the fiscal year that ends in March 2008. The RBI, however, is expected to keep its key short-term lending rate unchanged, citing the potential risk of inflation from high global oil prices. It also keeps the proportion of cash banks have to keep with it on deposit by 50 basis points to 7.5 per cent.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.