It’s been a while since we’ve had good inflation news: Annual urban inflation in October eased for the first time in six months on the back of slowing food and beverage price inflation. Consumer prices in urban areas decelerated to 35.8% y-o-y from 38.0% in September, marking October as the first reprieve since April, according to figures released yesterday by state statistics agency Capmas. Headline inflation has been running above 30% since February on the back of a series of currency devaluations and the FX crunch.

The figure came in lower than expected: The median forecast in a recent Reuters poll saw annual inflation easing to 37.1%. Analysts in a CNBC poll, however, predicted an acceleration of between 0.5-1.5%.

What to look for next: Core inflation figures are due out today from the central bank.

We were also none the wiser: Analysts we spoke with were split on which way the inflation figures would go, with some worrying that the parallel market would continue to put pressure on prices and others believing the Madbouly government’s curbs on key food items would pay dividends.

You can thank food and beverage prices: Food and beverage prices — the largest components of the basket of goods and services used to calculate inflation — slipped to 71.3% y-o-y from a record high of 73.6% in September. This is the first time food inflation has slowed since April.

What changed? The government agreed with private food producers to cut prices of 10 keyfood items by 15-25% from the middle of October in a bid to reel in inflation.

Monthly inflation figures are also back on a downward trend: October put monthly inflation back on a downward trend, coming at 1.0%, down from 2.0% in September.

The intensifying FX crunch means this isn’t over -Goldman: “The weakening of the EGP in the parallel market suggests broader upward pressure on domestic prices going forward,” Goldman Sachs analysts wrote in a report picked up by Bloomberg. “This is likely to keep real interest rates deep in negative territory in the months to come” and necessitate further interest rate hikes.

Remember: The EGP has weakened to record lows against the greenback in the parallel market in recent weeks as pressure builds on the currency. The currency was trading at 48.0 to the USD compared to the 30.9 official exchange rate on Thursday, according to traders.

The international press also has the story:Reuters | Bloomberg.

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