CAIRO (Reuters) – Inflation in Egyptian cities is expected to rise to a new record for the fourth month in a row in September, a Reuters poll showed on Sunday. The rise of the pound, about its true value.
A Reuters poll of 18 analysts had its average forecast for the annual inflation rate for urban consumers to rise to 37.6 percent from 37.4 percent in August. Inflation has been rising steadily since June, when it hit a record high of 35.7 percent. The previous high was reached at 32.95 percent in July 2017.
“We expect inflationary pressures to continue due to foreign exchange shortage and its impact on the non-oil sector,” HC Securities said.
The central bank allowed the Egyptian currency to depreciate by less than half in the year ending March 2023, but it remains stable despite a commitment to the International Monetary Fund to adopt a flexible exchange rate.
“We believe earlier declines in the pound are still being felt, but the impact of higher agricultural commodity prices and an increase in global prices will boost inflation in September,” said James Swanston of Capital Economics.
After raising interest rates in August to curb inflationary pressures, the central bank left interest rates unchanged at its most recent meeting on September 21. It has raised interest rates by 1,100 basis points from March 2022, but the lending rate at 20.25 percent is still below inflation.
The average forecast of eight analysts surveyed, excluding fuel and some volatile food items, was for a decline to 40.2 percent from 40.4 percent in August.
The Center for Public Mobilization and Statistics and the central bank are scheduled to release inflation data for September on Tuesday.
(Prepared by Muhammad Ali Faraj for Arabian Bulletin – Editing by Ali Khafaji)
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