Egypt's Annual Inflation Hits Record Levels Amid Currency Devaluation

On Monday, the Central Agency for Public Mobilization and Statistics (CAPMAS) revealed on Monday that the annual consumer price inflation in Egyptian cities rose to a record 35.7% in June, a substantial increase from 32.7% in May.

A Reuters poll had projected that Egypt's inflation rate would likely spike to record levels in June. This was attributed to an unfavorable comparison base and increased demand during the Eid al-Adha holiday.

The Egyptian economy has been grappling with challenges since the devaluation of its currency by nearly half since March 2022, a move prompted by the revealing effects of the Ukraine crisis on its economic weaknesses.

In its most recent meeting, the Central Bank of Egypt (CBE) decided to maintain its overnight deposit and lending rates and the main operation rate of the Central Bank at 18.25%, 19.25%, and 18.75%, respectively. The credit and discount rate was also kept steady at 18.75%.

The Central Bank had kept interest rates steady last February, before raising them by 2% in March. In an effort to combat inflation arising from the Russian-Ukrainian conflict that began in late February 2022, the Central Bank increased interest rates by a total of 8% over four meetings in 2022.