Egypt’s monthly core inflation recorded zero in December 2020, down from 0.2 percent in the same month a year prior, and zero in November 2020, according to the Central Bank of Egypt (CBE).

Accordingly, as per the CBE’s calculations, Egypt’s annual core consumer price index rate slightly declined to 3.8 percent in December 2020, down from 4 percent in November 2020.

On Sunday, Egypt’s annual headline inflation also declined to its lowest since October, reaching 5.4 percent in December, down from 5.7 percent in November, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).

CAPMAS attributed the decrease to the reduction of record consumer prices in December by 0.5 percent in comparison to November

##.

Following their last meeting in 2020, to review the key interest rates, the CBE announced in December that it had reset its inflation target to be at 7 percent (±2 percentage points) on average during the fourth quarter of 2022, down from 9 percent (±3 percentage points) on average that was targeted for the same quarter, explaining that this action came as the CBE continues to support macroeconomic stability.

The CBE’s Monetary Policy Committee is expected to convene on 4 February, for the first time in 2021, to review the key interest rates in light of the global and domestic economic developments.

On 24 December, the CBE decided to maintain the current 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.

In its first review of the stand-by agreement loan that was completed on Friday, the International Monetary Fund expected Egypt’s inflation rate to range between 6.3 percent and 9 percent during FY2020/2021 and to stand at 7.5 percent through FY2023/2024.

It also projected Egypt’s public debt to GDP ratio to hit 93 percent in the current FY2020/2021 before falling below 75 percent in FY2025/26.