Pharos said that the headline consumer price index change decelerated from 4.8% month-on-month in November to 1.7% in April. It added that the timing of the next fuel price hike would be crucial in deciding on the interest rate reaction. If the government could manage to undertake the next fuel price hike after November 2017, the inflation rate will be on a notable downward trend. Pharos expected that foreign reserve interest rate hikes in June may add some pressure on the exchange rate. Furthermore, the MPC will not be obliged to mirror the foreign reserve rate hike automatically, unlike the GCC economies.

Source: Daily News Egypt May 11, 2017 14:15 UTC