Egypt’s annual urban consumer price inflation falls to 3.1% in October

Egypt's annual urban consumer price inflation falls to 3.1% in October
Egypt's annual urban consumer price inflation falls to 3.1% in October

Egypt's annual urban consumerprice inflation fell to 3.1% in October, from 4.8% in September, the country'sofficial statistics agency CAPMAS said on Saturday, opening the way for furtherinterest rate cuts by the central bank.

Egypt is approaching the end ofan IMF-backed economic reform programme after its annual inflation rate rose to33% in 2017. The country hiked domestic fuel prices in July under the terms ofthe agreement.

The IMF reforms have helped thegovernment bring the budget deficit under control, precluding the need toexpand the money supply. This in turn has reduced inflationary pressures.

In August and September theCentral Bank of Egypt (CBE) made two consecutive cuts to Egypt's overnightlending and deposit rates by a cumulative 250 basis points. Deposits now return13.25% and lending 14.25%.

Analysts expect the CBE to makefurther rate cuts before the end of 2019 as inflation decelerates, a Reuterspoll showed.

Radwa El-Swaify, head of researchat Cairo-based Pharos Securities Brokerage, said urban inflation "isslightly lower than our expectations of 3.5% YoY, setting the stage for 100 bpscut in rates on Nov. 14".

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