Dubai, UAE–Egypt’s annual core inflation rate decelerated by 1.6 percent in October, recording 38.1 percent, down from 39.7 percent in September, according to data released by the Central Bank of Egypt (CBE) on Sunday.
The monthly core inflation rate rose to 1.8 percent in October compared to 1.1 percent in September 2023 and 3 percent in October 2022, according to the apex bank.
The annual headline urban consumer inflation rate reached 35.8 percent in October, down from 38 percent in September. Meanwhile, the monthly headline urban inflation rate decreased to one percent in October, down from two percent in September.
The government last week also announced increases in petrol prices of up to 14.3% amid higher global prices and a weakened exchange rate.
“The weakening of the pound in the parallel market suggests broader upward pressure on domestic prices going forward and (a Nov. 3) hike in domestic fuel prices will add to these pressures,” HSBC said in a research note.
Egypt’s currency was allowed to fall by about half against the dollar in the year to March 2023, but since then has remained fixed, despite an Egyptian commitment to the International Monetary Fund to adopt a flexible exchange rate.
The currency, officially at 30.85 to the dollar, has fallen to about 48 to the dollar from 40 pounds before the Gaza crisis broke out on Oct. 7.
The central bank, after raising interest rates in August to contain inflationary pressures, left rates steady at meetings on Sept. 21 and Nov. 3. Despite increases of 1,100 bps since March 2022, the lending rate, at 20.25%, remains well below inflation.