Egypt’s annual urban headline inflation fell to 9.7 percent in the twelve months to August 2013, down from 10.3 percent a month earlier, figures from the Central Agency for Statistics and Mobilisation (CAPMAS) showed on Tuesday.
The overall inflation rate registered 10.9 percent in August.
On a monthly basis, inflation dropped to 0.7 percent in August down from 0.9 percent in July.
Food and beverage prices, which contribute the highest weight to Egypt's consumer price index (CPI), slowed to 12.9 percent from 13.9 percent a month earlier.
Cairo-based investment bank Beltone Financial attributed the slowdown in inflation to lower consumption activity as a result of the end of Ramadan and curfew hours imposed by mid-month.
"An improved domestic currency has also contributed to a cheaper import bill, which feeds into the CPI," Beltone said in a note on Tuesday.
The Egyptian pound slightly appreciated in August on the back of aid Egypt received from Arab Gulf countries.
Beltone predicted urban inflation rate would stabilise at an average of 9.5 percent in the fiscal year which began in July 2013, compared to 6.9 percent in the previous fiscal year.
"While we expect growth to pick up as a result of expansionary fiscal and monetary policies leading to demand pull inflation," the investment bank explained, "we believe an improved currency and well-addressed supply shortage issues will limit increased inflationary pressures."