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Egypt's inflation drops, paving way for rate cut

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Egypts inflation drops, paving way for rate cut

Published: Fri 9 Mar 2018, 9:02 PM

Last updated: Fri 9 Mar 2018, 11:05 PM

Egypt's annual inflation dropped in February to its lowest in more than a year, paving the way for a potential interest rate cut later this month.
Inflation climbed after the country floated its currency in Nov 2016 to lure back investors driven away by a 2011 uprising. It reached a record high in July on the back of energy subsidy cuts, but has gradually eased since.
Annual urban consumer price inflation fell to 14.4 per cent in February from 17.1 per cent in January, the official statistics agency CAPMAS said.
Core inflation, which strips out volatile items like food, fell to 11.88 per cent from 14.35 per cent, central bank data showed.
"The Central Bank of Egypt is ahead of target on the year-end inflation rate. The drop supports another one per cent cut in (interest rates at) the next monetary policy meeting," said the head of research at Pharos Securities Brokerage, Radwa El Swaify.
Other economists said they also expected a cut at the March 29 meeting. The central bank raised key interest rates by 7 per centage points after it floated the currency. It cut them by one point last month.
Turmoil that followed the 2011 uprising slowed Egypt's economic growth, but a $12 billion International Monetary Fund reform programme signed in 2016 has begun to bear fruit. - Reuters
 

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