Iran's monthly inflation halved to 3.6% in the month to July 22, with the consumer price index 83.9% above its year-earlier level, the Central Bank of Iran said.

The monthly slowdown is the first clear sign of disinflation since the war with the US began in February, but the annual figures show how far prices have run. Average inflation of 61.4% over the past 12 months keeps Iran among the world's highest-inflation economies and leaves the central bank little scope to loosen policy while the rial trades at about IRR1,834,000 to the dollar on the open market.

The urban consumer price index reached 742.8 in Tir, the fourth month of the Iranian calendar year, covering June 22 to July 22.

The goods component rose 2.6% month on month and 121.5% year on year, with average inflation for the goods basket over the past 12 months at 86.1%.

Services rose 5.1% m/m and 48% y/y. The 12-month average for services was 39%.

Housing, water, electricity, gas and other fuels led the monthly increases at 5.9%. Miscellaneous goods and services rose 5.6%, furnishings, household equipment and routine maintenance 5.1%, health 4.9% and clothing and footwear 4.6%.

At the other end, food and beverages rose 1.8%, well below the headline rate. Education rose 1.2% and communications 1.1%. Transport was up 2.4%, while recreation and culture and restaurants and hotels both rose 3.8%.

Tobacco was the only major category to fall, dropping 0.5% from the previous month.