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Iraqi central bank says inflation is dropping

Iraqi central bank says inflation is dropping

The Associated Press Published: July 21, 2008

BAGHDAD: Iraq's central bank says the inflation rate in June dropped to 12.4 percent, partly reflecting a drop in food prices.

A bank statement says inflation was 14.7 percent in May. Inflation was as high as 69.6 percent at the end of 2006 before falling sharply. The bank has said the reduction was due partly to higher interest rates.

Bank officials say food prices have fallen because of good agricultural production in Iraq. They say the Iraqi dinar has also strengthened against the U.S. dollar.

Iraq has benefited from high oil prices, but the security situation in some areas and corruption are still major obstacles to economic development.

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