960405

Italian inflation

falls sharply for

third month

ROME: Italian inflation dropped sharply for the third month running in March, the official statistics office Istat said on Friday.

Istat said inflation was 4.5 percent year-on-year last month against 5.0 percent in February, giving a 1.3 percentage point fall in the consumer price index since December.

The Italian bond market was expecting the decline and barely moved on the news.

"The figure is good but the market had already discounted it and is already looking for a further fall next month," one trader said.

Bank of Italy governor Antonio Fazio indicated last month that inflation must touch the four percent mark year-on-year before he would cut the country's high interest rates.-Reuter