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Egypt: Inflation up to 22% in December

January 10, 2023 at 9:56 am

A man counts Egyptian pounds at currency exchange shop in downtown Cairo on 3 November 2016 [KHALED DESOUKI/AFP/Getty Images]

Inflation reached 21.9 per cent in Egypt in December, up from 19.2 per cent the previous month, the  state-run Central Agency for Mobilization and Statistics revealed today; the highest level since December 2017.

“This is primarily due to pass-through effects from the pound’s depreciation at the end of October, as well as further weakening of the currency in the parallel market through December,” Goldman Sachs said.

The Central Bank devalued the Egyptian pound by approximately 14.5 per cent on 27 October and allowed it to continue to decline gradually and slowly in November and December.

Five analysts also expected core inflation to jump to 23.6 per cent, up from 21.5 per cent in November.

Rising inflation will put pressure on the central bank’s Monetary Policy Committee to raise interest rates at its next meeting on 2 February.

The central bank Monetary Policy Committee stated that a decision was made to raise interest rates on overnight deposit, lending and the rate of the main operation of the Central Bank by 300 basis points, to reach 16.25 per cent, 17.25 per cent, and 16.75 per cent, respectively.

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