Iraqi Dinar News - Iraq inflation battle 'top priority'

2007: Iraq inflation battle 'top priority'

Iraq inflation battle 'top priority'

March 25, 2007

Iraq

promised to make tackling high inflation one of its priorities and said it will gradually keep raising domestic prices of fuel products to curb a thriving black market, according to a letter by Iraq's top finance officials to the International Monetary Fund (IMF)."Inflation has risen to an unacceptable level," the letter, signed by

Iraq

's central banker Sinan Al Shabibi and Finance Minister Bayan Jabor, told the IMF. Racing inflation of almost 77 per cent in August, fell back to 52pc from September to November, and increased again to almost 65pc in December. It has caused added hardships among a population struggling with conflict since the US-led invasion in 2003.

Domestic fuel prices have also been driven up with the phasing out of fuel subsidies under a $715 million IMF economic program, which was recently extended by the government to September.

Excluding fuel and transportation, the inflation rate was stable in a range of 30pc to 35 pc.

"To curb inflation, the CBI (central bank of Iraq) will continue its tight monetary policy stance and allow the exchange rate to appreciate gradually, assuming the inflationary situation warrants a continuation of this policy," the Iraqis said.

The Iraqis said they were committed to facilitate private sector imports of petroleum products, following a new oil law aimed at bringing private firms, both Iraqi and foreign, into oil products distribution.

The oil law illustrated that

Iraq

was getting closer to setting up a framework for foreign companies to invest in the country's oil production, crucial for rebuilding the economy.

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