Egypt's annual urban consumer price inflation picks up to 30.9 pct in March

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Monday - 10 April 2017

CAIRO, April 10 (Reuters) - Egypt's urban consumer price inflation rose for the fifth consecutive month in March, reaching an annual 30.9 percent, its highest point in more than three decades. 

Egypt abandoned its currency peg of 8.8 to the U.S. dollar on Nov. 3 in a move that has since seen the currency depreciate roughly by half, driving up the price of imports. The pound has since been stable around 18 per dollar for the past two weeks. 

The official CAPMAS statistics agency said on Monday that in Egyptian cities and towns, food and beverage inflation reached 41.8 percent year on year in March. 
 

March's annual inflation figure - which is up from 30.2 percent in February - is the highest since June 1986, when it reached 35.1 percent, according to Reuters data. However, monthly urban inflation eased to 2 percent in March from 2.6 percent in February. 

The central bank accompanied the November float with a 3 percent interest rate hike to fight price pressures but inflation is expected to keep climbing as the government pushes on with economic reforms, including fuel subsidy cuts. 

The economic reforms helped Egypt secure a $12 billion loan programme from the International Monetary Fund in November. 

President Abdel Fattah al-Sisi is under increasing pressure to revive the economy, keep prices under control and create jobs to avoid a backlash from the public. 

Egypt's central bank has held interest rates steady at four monetary policy meetings since the currency flotation although some economists expect further rate hikes this year. 

IMF mission chief for Egypt Chris Jarvis said in January the fund expects inflation to begin dropping sharply by the second quarter of 2017. 

(Reporting by Asma Alsharif; Editing by Toby Chopra) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))