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 per cent from 13.6 per cent 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 per cent 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 March 18. Prices rose 0.3 per cent in February from last month, the central agency said. The cost of food and drinks, which make up more than 45 per cent of the consumer price index, rose 1.1 per cent in the month, the agency said. The costs of housing, water, electricity and fuel fell 2.3 per cent. Economic growth slowed to 4.5 per cent in the last quarter of 2009 from 4.9 per cent in the previous three months, Economic Development Minister Osman Mohamed Osman said in January, citing initial data. The government expects the economy to expand about 5 per cent in the fiscal year through June 2010, compared with 4.7 per cent a year earlier, he forecasts. Growth in the last fiscal year was led by construction and telecommunication. Shares of Orascom Telecom Holding SAE, the biggest mobile-phone operator in the Middle East by subscribers, have gained 22 per cent this year.
