The Central Bank of Egypt will review interest rates at a meeting of its Monetary Policy Committee on 28 December. Keep an eye on monthly inflation figures due out any time in the coming few days: In annual terms, core inflation fell to 30.53% in October from 33.26% in September, but that wasn’t enough for the central bank to cut interest rates as monthly inflation was up on the back of increases in the price of school tuition fees and mobile phone scratch cards. We see declining month-on-month inflation and continued improvement in annual inflation figures as triggers for the central bank to declare that victory is imminent in its battle against inflation. It is anyone’s guess whether that translates into (a) a clear signal in the post-MPC statement that a rate cut is in the cards or (b) the announcement of 200 bps cut to account for the “temporary” rate hike back in July to target inflation. The CBE has set an “inflation target of 13% (+/- 3%) [for] 2018 Q4 and single digits thereafter.”

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