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Rate Cut on the Horizon as Egypt's Inflation Hits Four-Year Low

  • Economists expected fuel-subsidy cuts to boost inflation
  • Deceleration could allow Egypt to join global easing cycle
The Al-Attaba market in Cairo.

The Al-Attaba market in Cairo.

Photographer: Khaled Desouki/AFP via Getty Images

Updated on

Egypt’s annual inflation hit its lowest rate in four years, bucking expectations that cuts in fuel subsidies would spur an acceleration and raising the chances of the central bank joining a global easing cycle.

Consumer prices in urban parts of Egypt increased by 8.7% in July, compared to 9.4% the month before, the state-run statistics agency CAPMAS said Thursday. That may give the central bank breathing space to make its first rate cut in six months when it meets Aug. 22. The benchmark rate is currently 15.75%, helping power the world’s best carry trade for foreign investors.