Iraq's core inflation falls to 2.7 pct in June

BAGHDAD, July 27 (Reuters) - Iraq's core inflation continued to slow in June, dropping to an annual rate of 2.7 percent from 3 percent in May, a senior official in the central bank said on Tuesday.

The central bank cut its key interest rate by 100 basis points to 6 percent in April in reaction to subdued inflation, although the rate is largely symbolic in an economy emerging from war and still largely disconnected from the global financial system.

The bank defines core inflation as excluding expenditure on fuel.

Iraq's formal economy, as it pulls out of years of sectarian carnage that followed the 2003 U.S.-led invasion, is dominated by the oil sector, which accounts for more than 95 percent of government revenues.

(Reporting by Aseel Kami; editing by Patrick Graham) Keywords: IRAQ ECONOMY/INFLATION ([e-mail]; [phone]; Reuters Messaging:[e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. 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.