Egypt's Annual Headline Inflation Rises to 7.1% in December
Source: www.export-egypt.com 1/9/2020
Egypt’s annual urban consumer inflation rose to 7.1% in December from 3.6% in November, statistics agency CAPMAS said , increasing chances of the central bank holding interest rates unchanged this month.
Month-on-month urban headline inflation stood at -0.2% from November, falling for a second consecutive month, CAPMAS said. Annual headline inflation had been expected to rise in December, as favourable base-year effects wear. off.
Inflation remains within the central bank’s target range of 9% plus or minus 3 percentage points.
The bank meets to set interest rates on Jan.16.
Egypt is emerging from a three-year IMF-backed economic reform programme that saw inflation soar as high as 33% during 2017.
The government has raised domestic fuel prices several times, most recently in July, as part of the terms of the $12 billion agreement.
That has in turn driven up prices of food including fruit and vegetables, with the government and military occasionally intervening to provide staple products at below-market rates.
Over the past two years price rises have slowed, with annual headline inflation had dropping to 3.1% in October, its lowest since 2005, according to Refinitiv data.
The central bank cut interest rates by a combined 350 basis points (bps) at its last three consecutive meetings and 100 bps in February.
Overnight rates are at 12.25% for deposits and 13.25% for lending.