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| 08 February, 2018

Egypt's inflation falls to 17.1% in January

Inflation reached a record high in July of around 35% on the back of energy subsidy cuts

Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt, June 7, 2017.

Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt, June 7, 2017.

REUTERS/Mohamed Abd El Ghany
CAIRO  - Egypt's annual urban consumer price inflation dropped to 17.1 percent in January from 21.9 percent in December, the official statistics agency said on Thursday.

Inflation reached a record high in July of around 35 percent on the back of energy subsidy cuts but gradually declined since as inflationary pressure caused by Egypt floating its currency eased.

The Egyptian pound lost half of its value and prices shot up after Egypt floated the currency in November 2016 to secure a $12 billion International Monetary Fund (IMF) deal to revive its economy.

The head of research at Pharos Securities Brokerage, Radwa El-Swaify, said even though the numbers support a rate cut, the Central Bank of Egypt might hold the rates in its MPC meeting on Feb. 15.

"We believe that there is still a high chance of maintaining rates at this meeting. If we see cuts, it will be within the 0.5-1 percent range," El-Swaify said.

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The IMF said in a report last month it expected inflation to fall to 12 percent by June and to single digits by 2019.  

(Reporting by Arwa Gaballa; Editing by Subhranshu Sahu and Raissa Kasolowsky) ((mailto:arwa.gaballa@thomsonreuters.com; +20 2 2578 3290;))