Egypt inflation eases on lower food prices

Egypt’s annual urban consumer price inflation fell to 35.8 percent in October from 38 percent in September, data from the country’s statistics agency Capmas shows.

Price rises slowed to an increase of 1.2 percent last month from a two percent rise in September.

Grain and bread prices dropped by 0.6 percent, while fruit prices fell by 2.9 percent. Vegetable prices were down 2.5 percent.

• Lay-offs in Egypt as economy continues to contract
• China injects $956m into Egypt’s central bank
• Egypt needs more dollars before devaluation, warn experts

However, prices increased for meat and poultry products, up by 5.6 percent, while dairy, cheese, and eggs were up 3.6 percent, and rental housing was 0.6 percent more expensive, Capmas said.

Inflation has accelerated every month since June, reaching 35.7 percent.

Earlier this month, the Central Bank of Egypt maintained key interest rates for the second consecutive meeting. Overnight deposit and lending rates stood at 19.25 percent and 20.25 percent, respectively.

Fitch Ratings has lowered Egypt’s long-term foreign-currency issuer default rating to B- from B, pointing to increased financial risks and rising government debt.

S&P Global Ratings last month lowered Egypt’s long-term sovereign credit rating to B- from B , because of the recurring delays in implementing monetary and structural reforms, which are worsening imbalances in the currency market.

Moody’s Investor Service also downgraded Egypt’s credit rating to “Caa1” from “B3”, blaming high inflation and rising domestic borrowing costs.