CAIRO: Egypt’s urban consumer inflation hiked to 10.6 percent in February, marking roughly a two percent rise from 9.7 percent in January, the Central Agency for Public Mobilization and Statistics (CAPMAS) announced Tuesday.
Egypt has witnessed soaring inflation after the government cut energy subsidies by 40 billion EGP ($5.6 billion) in July.
CAPMAS attributed the rise mainly to an 11.4 percent jump in cigarette prices, along with an increase of 20.4 percent in butane gas cylinders. The prices of vegetables, meats and dairy products surged by 5 percent, 2.7 percent and 2.9 percent respectively.
Inflation reached its peak in October, registering 11.3 percent.
In its last meeting on Feb.27, the Central Bank of Egypt (CBE) decided to keep the overnight deposit and lending unchanged at 8.75 percent and 9.75 percent respectively. Central Bank’s main operation and the discount rate were also kept at 9.25 percent each.
Over the past month, the pound has held steady against the dollar officially after the CBE allowed the pound to weaken in 10 depreciations in fight to wipe out black market. The pound market is changing hands now at 7.65 -7.70 EGP per dollar, very close to the official market level at which banks now sell the hard currency: 7.63 EGP.
Meanwhile, banking experts urged the central bank to increase the interest rate of local currency deposits to combat dollarization and reduce cash liquidity, in order to restrain inflation pressures that may occur due to the local currency depreciation against the dollar in a country that imports more than 60 percent of its needs.