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Mon 2 Feb 2009 12:39 PM

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Bahrain Dec inflation rises to 5.1%; M3 slows in Nov

UPDATE 1: Gulf country's inflation sees rise from Nov, when money supply eased.

Annual inflation in Bahrain rose to 5.1 percent in December from 4.3 percent in November, official data showed.

Bahrain's consumer price index rose to 109.4 points on Dec. 31 compared with 104.1 points a year earlier, according to data posted on the Central Informatics Organisation's website.

Consumer prices in December were steady compared with November as food, beverage and tobacco costs eased 1.2 percent, the data showed.

Moderating inflationary pressures across the Gulf region have allowed regional central banks to slash interest rates as they seek to defrost credit markets during a global financial crisis.

Bahraini money supply grew at its slowest pace in 17 months in November as funds being held in time and savings deposits advanced less rapidly, central bank data showed.

M3, the broadest measure of money circulating the economy, advanced 25.7 percent to 7.99 billion dinars ($21.20 billion), the central bank said in a monthly bulletin on its website.

Money supply growth in November - the slowest pace since June 2007 - eased from 32.1 percent in October.

Funds held in time and savings deposits grew 26.9 percent to 4.74 billion dinars in the year to Nov. 30, compared with growth of 36.5 percent a month earlier, the central bank said.

Demand deposit funds gained 22.4 percent in November to 1.73 billion dinars.

Foreign assets held by the central bank rose 0.66 percent to 1.29 billion dinars in the year to November, but were down more than 31 percent from a February peak, the data showed.

Inflationary pressures have been easing across the oil-producing Gulf region after oil prices collapsed more than $100 a barrel from a July peak.

Annual inflation in Bahrain rose to 5.1 percent in December, but were unchanged compared with the month earlier, according to the latest data published by the island kingdom's statistics body. (Reuters)