The Central Bank of Egypt (CBE) is likely to cut interest rates in the coming months as Egyptian inflation slashed to its lowest rate in more than three years, Bloomberg reported.
The fourth subsidy cuts to be enacted since the launch of the International Monetary Fund (IMF)-backed economic programme in November 2016 shall be taken in consideration before the CBE’s meeting to be held on Thursday, 11 July.
The recent increases in fuel prices are projected to affect Egypt’s economy from food to transportation.
“Falling inflation, coupled with the dovish shift among central banks around the globe, increases the chances of an interest-rate cut,” Jason Tuvey, senior emerging markets economist at Capital Economics in London, told Bloomberg.
On Wednesday, the Central Agency for Public Mobilization and Statistics (CAPMAS) announced that Egypt’s inflation fell to its lowest rate in more than three years in June to 8.9%, compared to 13.8% in the same month of 2018.
Month-on-month, the consumer price index (CPI) slid by 1%, recording 307.8 points last month, the CAPMAS added.
The CBE also posted that Egypt’s annual core inflation rate fell to 6.4% in June, compared to 7.8% in May.