QUITO, Ecuador (AP) -- Ecuador's government issued a decree setting price caps on nine basic food products in an effort to combat food inflation.Thursday's decree fixes price limits on items in the basic food basket -- such as noodles, sugar, milk and chicken -- which registered annualized inflation of 9.9 percent last month. Inflation for the food basket was just 2.6 percent for the period from July 2006 to July 2007.
The measure aims to lower production costs and avoid speculation, according to the text of the decree. President Rafael Correa has accused "powerful business interests" that oppose his government of speculation, but has given few details.
Ecuador's Finance Ministry hopes to finish 2008 with an annual inflation rate under 10 percent, up from its target of 5 percent early this year.
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