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Jordan's inflation rate rises to 6.1 per cent

Amman, January 11, 2011

Jordan's inflation rate rose to 6.1 per cent year-on-year in December compared to the same period last year, according to figures released by the Department of Statistics.

Compared with a month earlier, the December consumer price index (CPI) was up 1.2 per cent due to rise in transport, fuel and some major food and consumer items.

Jordan's annual inflation rose to 5 percent in the whole of 2010 against 2009, the department said. Inflation picked up last year from 3.9 percent at the start of 2010 as commodities and oil prices have increased.

Economists expect it to rise above 6 per cent in 2011 with upward pressure on commodities and oil prices but the government has set a target at around 5 per cent in this year's budget.

The monetary authorities have said there was no need o change interest rates for now but a more restrictive policy may be needed if inflation picks up beyond 5 per cent.

Inflation's fall from record highs and the economic downturn had prompted the central bank to slash it's benchmark interest rates by 250 basis points in total since November 2008.

Reviving inflationary pressures late last year have fuelled expectations among analysts and dealers in domestic market markets the scope for further interest rate cuts is decreasing.-Reuters




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