(Adds analyst's comment)

CAIRO, Jan 10 (Reuters) - Egypt's urban consumer price inflation was steady at 11.1 percent in December, unchanged from the previous month, while its core inflation eased to 7.23 percent, the central bank and the state's official statistics agency CAPMAS said on Sunday.

Core inflation, which excludes items such as fruit and vegetables whose prices fluctuate widely, eased to 7.23 percent in December from 7.44 percent in November.

The country of around 90 million relies heavily on imports of food and energy and has been struggling to earn hard currency since a popular uprising in 2011 drove tourists and foreign investors away.

Egypt has been facing mounting pressure to devalue the currency since it has been rationing dollars to keep the pound artificially strong at 7.7301 pounds. In December it raised its key interest rates by 0.5 percentage points, citing inflationary pressures as the reason behind the decision. ID:nL8N14D1WK

Since November the government had made it a priority to rein in rising food prices and has listed commodities that would be subject to price controls. It also expanded the mandate of its state grain buyer to import cheaper foods, and deployed army trucks to distribute subsidised meals. "Food inflation has declined slightly on a month-on-month basis, indicating that the government initiative to distribute food at low prices is starting to reap benefits," said Hany Farahat, senior economist at CI Capital.

"The inflation outlook in 2016 will depend mainly on devaluation, which in our view will materialise in the first quarter of 2016. This will add to inflationary pressures going forward."

(Reporting by Asma Alsharif; Editing by Greg Mahlich) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))

Keywords: EGYPT INFLATION/