Egypt’s annual urban rate of inflation dipped slightly in August, dropping to 31.9 percent from 33 percent in July, the official statistics agency CAPMAS said on Sunday.

Urban inflation climbed in July to its highest level in decades following subsidy cuts introduced by the government as part of a series of economic reforms aimed at improving the country's finances.

Urban consumer prices in August rose 1.1 percent in the month, while July saw a monthly increase of 3.2 percent, with spikes in fuel and electricity prices a key factor.

Food prices in August showed a year-on-year increase of 42.2 percent, while housing, water, electricity and gas prices have climbed by 7.7 percent, CAPMAS added.

In November 2016, Egypt floated its currency, slashing the value of the pound by half and triggering heavy inflation.

Egypt has been pushing ahead with a series of austerity measures, including fuel and electricity subsidy cuts, to help ease the country's gaping budget deficit.

The reforms have helped the government secure a $12 billion International Monetary Fund loan and allowed the central bank to revive its foreign currency reserves, which jumped to a record of $36.04 billion in July.

In July, Egypt's finance minister said the government expects that monthly inflation rates would stabilize over four months.