28/9/2011 0:00

The Central Bank of Iraq that monetary policy is able to rein in inflation, indicating that the causes of this phenomenon is due to two directions: first external because of the high prices in the world and second, a local is in the problems of housing and services.

The deputy governor of the Central Bank of the appearance of Mohammed in a press statement : There are two directions of inflation in Iraq are foreign and local levels, noting that the high prices in the world especially in the dollar zone is reflected in the imports of Iraqi goods and commodities, causing the rise in prices within the country and led to inflation.

He explained that the high prices of goods and imported goods amounted to over from 40 percent in the month of July of this year compared to July of last year 2010, pointing out that the source of domestic inflation lies in the housing sector and its attached services, which include high rents continuing reflected impact significantly on inflation in Iraq.

Salih stressed that the bank has processors in containing inflation by looking at three factors include the size of the reserves of the Central Bank retaining the dinar and trends in inflation and the balance of payments of Iraq through the ratio of exports compared Balastairadat of goods and services, indicating that the central bank has the ability to curb inflation in the country has a trade surplus is estimated between three to five percent, and has large reserves.

He noted that the curbing of inflation comes through the use of tools bank cash correctly to bolster the Iraqi currency by controlling the levels of liquidity and enhance the purchasing power of the dinar by use of the signal exchange and interest rate.

The Ministry of Planning announced high inflation during the month of August, by 1.5 percent compared with last July, noting that the annual index rose is also a large proportion was 5.2 percent compared with same month of last year 2010, while the central bank announced a rise in inflation, the basis for the month of August to reach of 7.61 percent, while the inflation rate to 5.24 percent.