Egypt’s annual urban consumer price inflation decreases

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Egypt’s annual urban consumer price inflation eased to 9.4% in June from 14.1% in May, official statistics agency CAPMAS said on Wednesday, a sharper decline than many analysts had expected after last week’s fuel price hikes.

“That’s a bigger than expected drop,” said Allen Sandeep, head of research at Naeem Brokerage.

“Good news for the markets, as this could raise hopes for a rate cut tomorrow.”

The Central Bank of Egypt’s monetary policy committee will meet on Thursday to decide whether to move its key interest rates. It held them steady at its last two meeting in May and March, after a surprise cut in February. Of 15 contributors to a Reuters poll, Naeem was the only one to predict a cut on Thursday.

Egypt raised fuel prices last week by between 16% and 30% as part of an International Monetary Fund (IMF)-backed economic reform programme that saw inflation rise to a high of 33% in 2017.