Egypt’s annual inflation rate jumped to 6.1 percent in July, up from the 4.6 percent recorded in the same month of 2020 and the 4.9 percent recorded in June 2021, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced on Tuesday.

The monthly inflation rate also went up by 1 percent in July to record 5.9 percent.

CAPMAS attributed this hike mainly to the increase in the prices of electricity, fuel, natural gas, and other fuel sources by 8.9 percent in addition to the rise in touristic tours by 6.9 percent.

The prices of cheese, dairy products, and eggs also went up by 2.2 percent in July, while the prices of meat and poultry rose by 1.2 percent, according to CAPMAS.

This came despite a decline in the prices of fruits in July by 3.4 percent.

In a meeting held on Thursday, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to keep the key interest rates unchanged for the sixth time in a row since December 2020.

It decided to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

The discount rate was also kept unchanged at 8.75 percent.

The decision came in light of June’s inflation rate, which was under the limit set by the CBE at 7 percent (±2 percentage points) through the fourth quarter of 2022.

Also, July’s inflation figures are still below the CBE’s target.

According to its recent report on Egypt’s economic outlook, the International Monetary Fund expected the country’s inflation rate to average at 6.6 percent in FY2021/22 — rising from 4.6 percent in FY2020/21 — and to go up to 6.9 percent in FY2022/23 — which exceeds the FY2019/20 level, when the inflation rate posted 5.7 percent.

A number of investment banks in Egypt predicted that the inflation rate will continue to rise through September, driven by Eid and the back-to-school season.

They also expected that the CBE will not introduce any cuts to the current interest rates throughout the end of 2021.

The MPC is scheduled to hold three more meetings through December to review the interest rates.

According to the CBE’s latest report on Egypt’s monetary policy, the “annual headline inflation rate is expected to be affected in the near-term by unfavourable base effects related to the normalisation of monthly inflation rates in 2021.”