CAIRO – Egypt’s annual urban consumer price inflation accelerated slightly to 5.7% in August from 5.4% in July, reaching its highest rate since November,the official statistics agency CAPMAS reported on Thursday.
The rate remains well within the target range of 5%-9% set by the central bank, which meets on Sept. 16 to decide interest rates.
The quickening of annual headline inflation was driven by sharp price increases in some food products including oils and vegetables, according to CAPMAS data. Month-on-month headline inflation slowed to 0.1% in August, from 0.9% in July, the agency said.
Inflation spiked in 2017 after the government launched economic reforms under a loan programme with the International Monetary Fund (IMF), but has slowed sharply over the past four years.
Last year, annual headline inflation decelerated to around the lowest levels seen in 15 years, but it has risen each month since April, when it stood at 4.1%. It last reached 5.7% in November.
Analysts say the recent rise in inflation has eased pressure for a cut in key interest rates, which the central bank has held steady since November.
Egypt has some of the highest real interest rates in the world, which have helped to attract investment in treasuries but discouraged corporate borrowing.