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Mon 26 Nov 2007 02:22 AM

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Oman body to fight inflation

Cabinet sets up ministerial committee to curb inflation, which accelerated to 16-year high in September.

Oman's cabinet created a ministerial committee on Sunday to try to curb inflation which has hit a 16-year high in the Gulf Arab state.

Annual inflation in Oman accelerated to a 16-year high of 7.09% in September, according to official figures, as food prices soared 14% in the Gulf Arab state that pegs its rial currency to the dollar.

The cabinet move came at a meeting held "in a bid to cope with global economic developments and their impact in raising some commodities' prices on the local market ... (and) identifying practical solutions to alleviate this phenomenon's impact on citizens and expatriates", the state news agency ONA said.

The anti-inflation committee will include the ministers of economy, commerce and industry, and fisheries as well as the chairman of Oman's chamber of commerce and industry, the agency added.

Oman, like its Gulf Arab neighbours, has been struggling to contain inflation at decade-high levels as its central bank traditionally tracks US interest rate policy to maintain the relative value of its currency.

Only 5.2% of Oman's imports in 2006 were from the United States, while 17.3% were from Japan, 5.1% from Germany, 5.3% from India and 3.4% from Britain, according to the 2006 Oman central bank annual report.