Cairo – Mubasher: The Central Bank of Egypt is likely to raise interest rates after inflation rate, which covers urban consumer only, soared to 10.9% in April 2016, said Capital Economics.
Egypt’s Consumer Price Index (CPI) rose to 10.9% during April 2016, compared with 9.2% in April 2015, said the Central Agency for Public Mobilization and Statistics (CAPMAS).
The Middle East Data Response indicated that this inflation was mainy driven by food inflation and pressure on “the currency building”.
Food inflation, which accounts for around 40% of the CPI basket, increased to 12.7%, compared with 12.1% in the previous month. Housing and utilities inflation also rose from 0.1% in April to 5.5% a month earlier.
Based on the current indicators, inflation is forecast to rise further over the coming months which will probably prompt the bank of Egypt to hike interest rates.
“We expect inflation to rise further over the coming months as the impact of March’s devaluation continues to feed through into wider economy”, said the agency, adding “the CBE will probably hike interest rates in the coming months”, said Capital Economics
