Iraqi Central Bank raises interest rates to 16%

The Iraqi Central Bank uncovered the high inflation last October by 2.7% from the previous month, pointing out to the adoption of a strict policy on interest rates and lift them to 16% to motivate commercial banks to make fundamental adjustments in various bank interest rates to deal with this inflation.

A statement issued by the Central Bank said: "the index of consumer prices in Iraq in October 2006, express increase in the inflation rate by nearly 2.7% compared with September of the same year".

The statement added that the increase showed "diverse rises in the prices of all goods and services, reflected in one form or another at the level of annual inflation which witnessed a remarkable increase of about 9.52% according to the indicators of October compared to last September, about 6.51%".

The Central Bank noted that «in spite of the slight decline in the annual rate of inflation last October 2006, which was the index of consumer prices, and from which the items of fuel, lighting, transport and communications were excluded, it recorded nearly 32% after it witnessed a rise of 33.1% in September of this year".