FINANCIAL NEWS

Iraq central bank cuts base rate to 6%

11 Apr 2010

(MENAFN) The Central Bank of Iraq (CBI) announced that it has decided to cut its base rate by 100 basis points to six percent, in reaction to subdued inflation and to boost bank lending, Reuters reported.

The bank has also cut banks’ reserve requirements to 20 percent from 25 percent, a central bank adviser said, adding that the rate move reflects the bank’s policy of keeping real interest rates two points above core inflation.

The International Monetary Fund (IMF) forecasts economic growth of 7.3 percent this year, accelerating from estimated 4.2 percent growth last year but well off 9.5 percent growth in 2008 when oil prices were at record highs.

Oil exports account for more than 95 percent of Iraqi state revenue, and the government is by far the biggest employer, but decades of war and sanctions have left Iraq’s financial system in tatters.

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