Bangladesh March inflation falls to 8.78 pct yr/yr

DHAKA, May 10 (Reuters) - Bangladesh's annual consumer price inflation rate slowed slightly to 8.78 percent in March, its first decline since September, from 9.06 percent the previous month, data showed on Monday. Food price inflation in March slid to 10.80 percent from a year earlier after a rise of 10.93 percent in February, while non-food items dropped to 5.60 percent from 6.14 percent, the Bangladesh Bureau of Statistics said. The central bank has raised banks' reserve requirement ratio by 50 basis points to 5.5 percent, effective from May 15, its first increase since October 2005, to rein in inflation. The central bank said it expected average inflation to moderate to 6.5 percent in the 2009/10 fiscal year through June for 7 percent in the previous year. It cut its key repo and reverse repo rates by 400 basis points in the last quarter of 2009 to 4.5 percent and 2.5 percent respectively. Inflation is rising after hitting a 90-month low of 2.25 percent in July 2009. It hit a 14-month high of 7.24 percent in November 2009. Rising prices is a major concern for the government as nearly 40 percent of people live on less than $1 a day. (Reporting by Ruma Paul; editing by Jason Webb) ((; +880-2-8330123; Reuters Messaging: Keywords: BANGLADESH ECONOMY/INFLATION (If you have a query or comment on this story, send an email to COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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