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Ahram Online: Egypt's urban inflation rises to 12.7 pct in January

The central bank’s monetary policy committee will meet to decide on interest rates on Thursday.
11.02.19 | Interesting article at Ahram Online

Egypt’s annual urban consumer price inflation increased to 12.7 percent in January from 12.0 percent in December, the CAPMAS statistics agency said on Sunday, though the data was unlikely to quell speculation the central bank may soon cut rates.

Inflation had cooled in December after an increase in fuel, electricity and transportation prices last year had sent the rate up to a high of 17.7 percent in October.

Egypt has implemented a series of tough austerity measures, including deep cuts to energy subsidies, to help meet the terms of a $12 billion IMF loan programme it signed in late 2016.

Allen Sandeep, head of research at Naeem Brokerage in Cairo, said: “The rise in inflation is because of food and nonalcoholic beverages, wherein month-on-month inflation came in at 0.9 percent versus -6.7 percent in December.”

“Overall, while this is neutral from a consensus expectations standpoint, speculation will continue over a rate cut on Thursday,” he said.

The central bank’s monetary policy committee will meet to decide on interest rates on Thursday.

The bank, which is aiming for inflation of 13 percent plus or minus 3 percentage points, last moved rates in March, slashing the overnight deposit and lending rates by 100 basis points each to 16.75 percent and 17.75 percent respectively.