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UPDATE 1-Iraq c.bank cuts rates 200 bps to 9 pct to spur growth
Mon, 30th Mar 2009 18:37
BAGHDAD, March 30 (Reuters) - Iraq's central bank cut its base interest rate 200 basis points to 9 percent from 11 percent on Monday in an effort to spur growth threatened by falling oil revenues, a senior advisor at the bank told Reuters.
Mudher Mohammed Salih said the cut was partly enabled by a fall in inflation to 7 percent from 9.2 percent in January.
'Interest rates could fall again to 7 percent or less in the middle of June,' Salih said, adding that he expected inflation then to fall to 5 percent.
At the beginning of this month, the bank cut rates by a one percentage point, aiming to shore up Iraq's economy and protect it from the global financial crisis.
But interest rate changes are seen as largely symbolic in Iraq, whose economy outside the state sector and crude oil production is for the most part informal. Decades of war and sanctions have left the country's financial system in taters.
(Reporting by Wisam Mohammed; Writing by Tim Cocks;
Editing by Victoria Main) Keywords: IRAQ/RATE
(tim.cocks@thomsonreuters.com; Reuters Messaging: tim.cocks.reuters.com@reuters.net; +964 7901 917033)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Mudher Mohammed Salih said the cut was partly enabled by a fall in inflation to 7 percent from 9.2 percent in January.
'Interest rates could fall again to 7 percent or less in the middle of June,' Salih said, adding that he expected inflation then to fall to 5 percent.
At the beginning of this month, the bank cut rates by a one percentage point, aiming to shore up Iraq's economy and protect it from the global financial crisis.
But interest rate changes are seen as largely symbolic in Iraq, whose economy outside the state sector and crude oil production is for the most part informal. Decades of war and sanctions have left the country's financial system in taters.
(Reporting by Wisam Mohammed; Writing by Tim Cocks;
(tim.cocks@thomsonreuters.com; Reuters Messaging: tim.cocks.reuters.com@reuters.net; +964 7901 917033)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
