The Central Bank said today that the Inflation declined to 24.9 percent in August from the peak of 28.2 percent in June 2008. The Bank attributed the drop to decline in food prices as well as to tight monetary policy.

The Central Bank says it had tightened the reserve money targets in September and expects to meet its third-quarter goal keeping interest rates steady for 19 months straight.

"Having met the quarterly targets for average reserve money in the first and second quarters of 2008, the Central Bank has been able to maintain average reserve money well below the indicative targets for July and August 2008, and it is therefore expected that the reserve money target for the quarter ending September 2008 would be achieved," the Bank said in its monthly policy review for September.

The Central Bank expects to contain inflation further as the international commodity prices ease and become more favorable on both demand and supply sides.