Egypt's annual inflation rates were mixed in April, with one of its key readings showing an increase for the first time in eight months, data showed on Thursday, a week before the central bank will decide on interest rates. Inflation last year surged on the back of economic reforms tied to a $12 billion IMF loan programme Egypt signed in late 2016 that includes deep cuts to energy subsidies and tax hikes.
Prices soared in particular after the import-dependent country floated its pound currency in November 2016, reaching a record high of 33 percent in July 2017, though inflation rates have since gradually eased, reaching their lowest levels in almost two years in March. Core inflation, which strips out volatile items like food, increased marginally to 11.62 percent year-on-year in April from 11.59 percent in March, ending an eight-month streak of declining rates, according to central bank data.
Annual urban consumer price inflation meanwhile decreased, but marginally, to 13.1 percent year-on-year in April from 13.3 percent in March, the official statistics agency CAPMAS said, a smaller drop than in recent months.
The central bank hiked interest rates by 700 basis points amid the price rises but has since brought those rates back down, cutting them by 100 basis points at each of its last two meetings.
The bank will next meet on May 17 to set rates and analysts said that the latest readings and the prospect of additional fuel subsidy cuts expected in coming months could prompt it to hold back on further monetary easing.
"The latest data on inflation should make the case harder for the central bank to implement another interest rate cut in the upcoming monetary policy committee meeting," said head of research at Naeem Brokerage Allen Sandeep.
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