Cairo – Mubasher: Egypt’s inflation rate is expected to register 18.5% to 19% in the third quarter of fiscal year 2017/2018, according to a recent report by MubasherTrade Research.
The inflation data of December showed a high response to the base effect, MubasherTrade said, noting that positive base effect may continue to impact inflation readings for that January-March 2018 period.
“More importantly, we still consider lower inflation rates as a ‘gentle reminder’ for the Central Bank of Egypt to start lowering its key rates in its upcoming MPC meeting on 15 February,” the report mentioned.
Food and beverages prices account for about 80% of the inflation drop, 3.5% out of a 4.4% drop, in the consumer price index (CPI), the report indicated, adding that its contribution to total annual inflation fell by 3.50% from 17.07% out of 26.70% in November to 13.57% out of 22.33% in December.
In November 2016, the CBE liberalised the exchange rate of the EGP to drop by 50% against the US dollar.
The CBE had to raise key rates following the flotation of the local currency in November 2016, by a combined 7%, or at 3% in November, 2% in May, and 2% in July.
