Egyptian Inflation Slowed in February

Egypt’s inflation rate declined in February, giving the central bank more room to keep its benchmark interest rates at a three-year low as it tries to fuel economic growth.

Urban inflation, the benchmark rate that the central bank monitors, slowed to 12.8% from 13.6% in January, according to data on the Web site of the Cairo-based Central Agency for Public Mobilization and Statistics. The consumer price index was 144 in February compared with 127.7 in the same month the previous year, it said.

The central bank, which meets to decide on rates every six weeks, has kept its key overnight deposit rate at 8.25% for the past three meetings, citing “subdued” inflationary pressures. It cut rates six times in 2009 to help the economy through the global financial crisis, which reduced investment and damped revenue from tourism and fees from the Suez Canal. “Inflation is still not low enough for the central bank to cut rates” again, Reham El-Desoki, senior economist at Cairo- based investment bank Beltone Financial, said before today’s announcement. The bank’s next meeting on rates is on 18 March 2010.- Business Week