Inflation remains subdued in Seychelles, helped by the appreciation of the rupee in 2010 (by 11.3% to SRs12.1:US$1) and the currency's stability so far in 2011 (at about SRs12.25:US$1), which is helping to contain import prices. Nevertheless, consumer prices rose by 0.3% month on month in January, the fastest since August, driven by a rise in fuel prices for the first time since last June. The Seychelles Petroleum Company (Sepec) hiked the cost of petrol by 2.9% to SRs17.5/litre and that of diesel by 5.9% to SRs18/litre because of rising world prices. However, year-on-year inflation dipped back into negative territory in January-falling by 0.7% after two months of positive price growth-but this was primarily due to base effects. Average annual inflation remained in negative territory in January at -2.3%, compared with -2.4% in December 2010, but is now moving back towards zero. While inflation is currently subdued there are risks ahead, especially those posed by rising global fuel and food prices-and by the likely depreciation (albeit gradual) of the rupee. However, the Economist Intelligence Unit still expects inflation to remain below the government's official 3% target in 2011.