Mursi sworn in as Egyptian president

Mohammed Mursi has been sworn in as Egypt's first civilian, democratically elected president at a historic ceremony in Cairo.

Hours after the ceremony, he was saluted by Field Marshal Hussein Tantawi, leader of the military council which is handing over power.

Mr Mursi has promised to restore the parliament dissolved by the military.

In a speech at Cairo University, the Muslim Brotherhood politician said the army must respect the people's will.

He will have to sort out a very difficult relationship with an entrenched military, regional analyst Magdi Abdelhadi says.

The regime of former President Hosni Mubarak is still largely intact and many in it will not work with the new president, he adds.

Overthrown in February last year after mass pro-democracy demonstrations, Mubarak was sentenced to life imprisonment at the beginning of this month for failing to prevent the killing of protesters by the security forces.

Egypt, the biggest Arab nation, is a key US ally in the region, as well as one of the few states in the Arab world to maintain diplomatic relations with Israel.

Parliament was dissolved by Field Marshal Tantawi's Supreme Council of the Armed Forces (Scaf), which assumed legislative powers under a controversial "interim constitutional declaration".

But on Saturday Scaf handed over power to Mr Mursi after a military parade at the Hykestep military base on the outskirts of Cairo.

"We have fulfilled our promise which we made before God and the people," Field Marshal Tantawi said at the hand-over ceremony.

"We now have an elected president, who assumed Egypt's rule through a free and direct vote reflecting the will of Egyptians."

The field marshal, who saluted Mr Mursi and shook hands with him several times, decorated the new president with the Shield of the Armed Forces, the country's highest honour.

In his speech earlier at Cairo University, Mr Mursi said: "The army is now returning to its original role, protecting the nation and its borders."

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Food, fuel price falls ease Kenya inflation

Falling food and fuel prices helped bring down Kenya's year-on-year inflation rate more than expected in June, easing pressure on the central bank to keep its monetary policy tight.Kenyan consumer prices fell 0.77 percent in June, pushing the year-on-year rate to 10.05 percent from 12.22 percent in May, its lowest level since March 2011, data showed.

The consensus forecast in a Reuters survey of 11 analysts was for the rate in east Africa's largest economy to slow to 11.50 percent. "Whilst the CBS (Central Bank of Kenya) was reluctant to cut rates earlier - they focused on the strength of credit demand in April, and the turn in core inflation - we feel they should be somewhat more reassured by this outcome," said Razia Khan, head of Africa research at Standard Chartered bank.

"Inflation is more definitively on a downtrend, and with the gap between the central bank rate (18 percent) and inflation (10 percent and falling), we think there is an even stronger case to start the easing cycle now." The Kenya National Bureau of Statistics said food and non-alcoholic prices fell 1.91 percent in June, while housing, water, electricity, gas and other fuel costs slipped 0.20 percent.

On a year-on-year basis, the food and non-alcoholic beverages index, which makes up 36.04 percent of the total basket of goods and services used to measure inflation, rose 10.53 percent compared with a rise of 14.58 percent in May.

In June last year, the price of food and non-alcoholic drinks rose 22.52 percent year-on-year. "While this is the most volatile category in the CPI, we now have stronger indications that food prices are finally coming down after the sharp increases over the past year," said Mark Bohlund, senior economist for sub-Saharan Africa at IHS Global Insight.

"However, price growth in non-food prices was also slightly lower than our forecast for a 0.4 percent month-on-month expansion." However, some economic analysts said the fall in inflation was still insufficient to push the Monetary Policy Committee to cut rates at the next meeting on July 10. "While these data are encouraging, on their own they are unlikely to be sufficient to tilt the MPC into a cut at the next meeting," Leon Myburgh, sub-Saharan Africa strategist at Citibank.

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