Egyptian inflation slows to 9.7 % in August

Egypt’s urban consumer price inflation fell slightly in August, official figures showed on Tuesday, a slowdown attributed partly to a curfew to curb violence sparked by political turmoil, and to a strengthening in the national currency.

The state CAPMAS statistics agency said inflation fell in August to an annual 9.7 percent from 10.3 percent in July.

Egyptian inflation has been driven higher this year by a weakening of the Egyptian pound, though the currency has steadily appreciated against the dollar since the army deposed President Mohamed Mursi on July 3.

“The slowdown is attributable to lower consumption activity as a result of the end of Ramadan and curfew hours imposed by mid-month,” Beltone Research said. Consumption spikes during festivities that mark the Islamic holy month of Ramadan.

“An improved domestic currency has also contributed to a cheaper import bill, which feeds into the CPI (consumer price index),” it said. Lower international food prices had contributed to lower food inflation, it added.

The authorities imposed a nightly curfew on August 14 after countrywide violence ignited by the dispersal of Mursi supporters protesting at two Cairo sit-ins. This touched off the bloodiest spasm of bloodshed in Egypt’s modern history: hundreds of Mursi backers and more than 100 members of the security forces were killed.

The curfew now starts at 11 p.m.

Egypt’s annual consumer price inflation stood at 4.7 percent last December, before the central bank allowed the pound to fall against the dollar to stave off a currency crisis.

The pound has strengthened since the army overthrew Mursi – a move that was met by $12 billion in financial assistance from Gulf states hostile to his Muslim Brotherhood – and laid out a political transition plan envisioning new elections.

At official rates, the pound hit a historic low of 7 to the dollar, but has now strengthened to 6.89.

https://www.arabfinance.com/News/newsdetails.aspx?Id=260753

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