CAIRO: Egypt's annual urban consumer price inflation was unchanged at 14 percent in July and core inflation edged down as the effects of this year's currency devaluation continued to feed through.
Egypt's urban consumer price inflation had been rising since April, when it entered double-digit territory propelled by a near 14-percent devaluation of the Egyptian pound and the run-up to the Muslim fasting month of Ramadan, when food prices rise.
Ramadan ended in early July, but data published by Egypt's statistics authority showed that food inflation continued to rise, offset by easing inflation in housing and utilities.
Annual core inflation, which strips out items such as fruit and vegetables whose prices are volatile, eased slightly to 12.31 percent in July from 12.37 percent in June though it remains at a seven-year high.
The central bank attributed the headline consumer price inflation figure to "a favourable base effect from the previous year" when Ramadan fell in July and prices were elevated.
Egypt has struggled to restore economic growth since a 2011 uprising that ended Hosni Mubarak's 30-year rule. The ensuing turmoil scared off tourists and foreign investors, key sources of hard currency.
Foreign reserves have more than halved since before the 2011 uprising to about $15 billion in July, enough for less than three months of imports.
The central bank devalued the pound to 8.78 per dollar in March and has hiked interest rates to hold back prices. But the pound continues to face pressure on the black market due to the dollar shortage. Economists say another devaluation is likely.
Egypt announced in late July that it was entering the final stages of negotiations with the International Monetary Fund for a $12 billion loan programme over three years.
While easing the pressure on public finances, an IMF deal would increase pressure on Egypt to push ahead with reforms that include introducing Value Added Tax and slashing subsidies. Both moves are likely to push up prices, economists say.
Economists are broadly in agreement that Egypt's Monetary Policy Committee is likely to raise interest rates further.
"The central bank doesn't have an inflation target but policymakers have previously suggested that they are more comfortable with inflation in single digits," London-based Capital Economics said in a research note.
"We remain of the view that the MPC will hike interest rates further this year."
President Abdel Fattah al-Sisi has been at pains to protect the poorest from the effects of double-digit inflation, with the army offering cut-price food to the public.
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