However, many experts, who share the same point of view with the IMF, believe that Egypt’s inflation rate was already among the highest in the world even before such price shocks, according to CBE’s historical data, Egypt’s inflation rate registered at 15.5% in August 2016. In their opinion, the primary driver behind Egypt’s soaring inflation is not the devaluation or fuel price hikes. Raising interest rates was the solution advised by the IMF and many other experts to tackle this problem. Moreover, a soaring inflation rate has taken its toll on the consumer purchasing power. However, rising interest rates, by 7 pp after flotation, have led to a rise in both the cost of debt and the cost of equity.

Source: Daily News Egypt July 11, 2017 06:56 UTC