Cyprus inflation rate eased to 5.4% in August 2008 from 5.6% in July, although it remained above the 2.5% recorded in August 2007. The inflations decrease is mainly attributed to the drop in oil prices, which appears to have had an immediate impact on Consumer Price Index.

The Consumer Price Index for August 2008, increased by 0.39 units or 0.36% to 110.24 units compared to 109.85 in July 2008. This is mainly due to increases in the prices of certain fresh vegetables and electricity. Decreases have been recorded in the prices of petroleum products and certain clothing items, an official announcement issued here today said.

The rate of increase of the Index and therefore the rate of inflation for August 2008 was 5.4% compared to 5.6% in July 2008 and 2.5% in August 2007.

The Russian Foreign Ministry has welcomed the beginning of direct talks on the Cyprus problem.

In a press release issued Thursday, the Russian Foreign Ministry said that we expect that the process of the talks will continue constructively, in a spirit of trust, mutual understanding and respect, without attempts from abroad to exert pressure and supervision, and that this will lead to compromising agreements, on the basis of the relevant UN resolutions, to the benefit of all Cypriots.

We hail the beginning on September 3 of direct full-fledged talks, under the UN auspices, between the leaders of the two communities in Cyprus, the press release adds, which is posted on the Foreign Ministrys official website.

Cyprus President Demetris Christofias discussed in Stockholm with Swedish Foreign Minister Carl Bildt the Cyprus question, Swedens role in efforts to reach a Cyprus settlement and the enhancement of bilateral relations between Cyprus and Sweden.

President Christofias, who is currently in Sweden for a two - day visit, said in statements after the meeting, which lasted for about an hour, that they had a friendly and comprehensive discussion.

We have reviewed the Cyprus question in detail and the role of the talks that we have started and that will be of decisive importance, and also the role which Sweden can play as an EU member state, which has very friendly relations with Turkey, President Christofias noted.

He said that we have come to the conclusion that this role can be exercised and be effective toward the Turkish leadership, so that some issues of principle regarding security, ownership and other aspects of the Cyprus question will be understood and accepted.

As regards the discussion on the two countries bilateral relations, President Christofias noted the satisfaction expressed during the meeting about the level of these relations.

We also acknowledged the broad spectrum of the relations and the ample of room there is to further develop these relations, he added. Earlier, Christofias met with the Speaker and members of the Parliament of Sweden. Christofias described the meeting as friendly, noting that the Swedish parliamentarians were interested very much in the beginning of the talks and the prospects for their success.

That gave me the opportunity to develop the views, the positions and our assessment regarding the progress so far, and the possible problems that we will face, he added.