RABAT (Reuters) -- Morocco's year-on-year inflation rate slowed to 3.5 percent last month from 4.2 percent in October as food prices fell, the country's High Planning Commission said.

Food prices slipped 0.6 percent from October while prices of other categories of goods and services were little changed, it said in a statement.

The inflation rate for the first 11 months of the year was 3.3 percent, above the government's earlier forecast for the full year of 2.0 percent.

Morocco's economy has rebounded quicker and more decisively than expected from a weak 2005, when growth slowed sharply after a drought hit farm incomes and dampened household consumption.

In a separate statement carried on state news agency MAP, Morocco's central bank said it expected underlying inflation of 2 to 3 percent in the first quarter of 2007 and 2.1 to 2.8 percent for the full year.

Underlying inflation is the bank's preferred inflation gauge and excludes some goods and services whose prices are highly volatile.

Inflationary risks were likely to continue in the short term, the central bank said, citing high world oil prices and surpluses of excess liquidity.

"Bank Al Maghrib (Bank of Morocco), which is pursuing a vigilant monetary policy, decided to maintain interventions in the money market, mainly by mopping up liquidity through seven-day tenders at a rate of 2.75 percent," MAP cited the bank as saying.

The central bank began publishing core inflation figures this year as part of measures to make monetary policy more reliable and transparent.