Egypt inflation edges up to 10.9 pct in Aug

CAIRO (Reuters) - Urban consumer inflation in Egypt remained relatively steady in August, a sign the central bank is unlikely to raise interest rates when its Monetary Policy Committee meets next week.

Inflation in the 12 months to August inched up to 10.9 percent from 10.7 percent in the 12 months to July, the state statistics agency CAPMAS said on its website on Wednesday.

The average forecast by five analysts polled by Reuters was 10.4 percent, with their forecasts ranging from 9.6 percent to 11.2 percent. Urban inflation is the most closely-watched indicator of prices. For details, see

Economists say Egypt's relatively strong economic growth and subdued inflation means monetary authorities are likely to have little incentive to raises rates before the end of the year.

Inflation has slowed from a peak of 23.6 percent in August 2008 and has fallen in most months this year from 13.6 percent in January.

Gross domestic product rose by an annualised 5.9 percent in the quarter that ended in June.

The central bank has not changed its key interest rates since September 2009, leaving the overnight lending rate at 9.75 percent and the overnight borrowing rate at 8.25 percent. The monetary committee meets next on September 16.

Earlier this week the bank said Egypt's balance of payments had swung sharply into surplus in the financial year to end-June as portfolio investments in the country surged.