Egypt’s annual inflation rate eased to 10.2% in February, down from January’s 12.2%, the Central Agency for Public Mobilization and Statistics (CAPMAS) reported Monday.
The monthly inflation rate fell to 1% February, down from the 1.7% monthly increase in January. Between November and December inflation rates slumped to 1.3%.
The general prices of foods and beverages increased by 0.2% since January. Since February of last year, though, prices have dropped by 16.1%, CAPMAS reported.
Tarek Helmy, former vice chairman for the Principal Bank for Development and Agriculture Credit, attributed the rise in prices to a decrease in shown products in the market along with availability of funds and increase in consumption.
To control the inflation rate, the Central Bank of Egypt (CBE) can raise the interest rates to encourage people to keep their savings in the banks, “that way the demand on products will decrease,” Helmy said.
The government, however, decreases the interest rates or keeps it unchanged in order “to repay its loans with low interests and consequently reduce the budget deficit,” he said.
In an attempt to keep inflation rates stable, the CBE’s Monetary Policy Committee kept its overnight deposit rate, overnight lending rate and the rate of main operations unchanged, CBE announced earlier this month.
Helmy suggested that the government set indicative prices for commodities to control the market.
CAPMAS also reported that the urban consumer inflation rate in February also increased to 15.7% year on year and 0.3% month on month.