Cairo – Mubasher: The fall of inflation in November for the fourth consecutive month lays the ground for the Central Bank of Egypt (CBE) to cut interest rates in the Monetary Policy Committee's next meeting in December, according to Capital Economics (CE) report on Monday.
The fall of inflation highlighted “the unwinding impact” of currency float, the report added.
“We have pencilled in a 100bp cut to the benchmark overnight deposit rate, to 17.75%,” the report stated.
Inflation in Egypt will fall more than expected in the coming two years, CE forecasts.
“Against this backdrop, we think the Central Bank of Egypt will decide to cut interest rates at its meeting in late-December,” the report concluded.
Egypt's annual urban consumer price inflation recorded 26.7% year-on-year in November 2017, from 31.8% the previous month, the Central Agency for Public Mobilization and Statistics (CAPMAS) data showed.
Core inflation dropped to 25.54% from 30.53%, according to CAPMAS data.
