Kathmandu, Oct. 18 -- Nepal's inflation fell to a 21-year low in September, marking one of the weakest readings on record, as subdued domestic demand reflected a faltering economy weighed down by corruption, political instability, and a growing outflow of students and migrant workers.

According to Nepal Rastra Bank, the country's central bank, inflation stood at 1.87 percent in mid-September, down from 3.86 percent a year earlier. The last time inflation was this low was during mid-May to mid-July of fiscal year 2003-04, when it measured 1.8 percent.

Kiran Pandit, spokesperson for the central bank, said inflation had dropped sharply due to weak domestic consumption. "The recent political uncertainty, along with floods and landslides, ha...