This is the lowest recorded inflation rate since July.
Meanwhile, annual inflation jumped in December to 6.5 percent, up from six percent recorded in December 2020, added CAPMAS.
The decline in the monthly inflation rate was mainly driven by the decrease food and beverage prices by 1.2 percent, while prices of other commodities rose by between 0.6 percent and 1.4 percent, CAPMAS said.
The agency attributed the increase in the annual inflation rate to the significant rise in food and bavarage prices, which went up by 9.7 percent.
Moreover, the prices of healthcare services rose in December by 3.2 percent, education services by 13.9 percent, and entertainment and agriculture services by 11.7 percent, compared to December 2020.
According to its recent forecasts, the International Monetary Fund (IMF) expects Egypt’s inflation rate to accelerate to 6.3 percent in 2022, having predicted the rate to reach 4.5 percent in 2021.
The Central Bank of Egypt scheduled the first meeting of its Monetary Policy Committee (MPC) for 2022 on 3 February to review the key interest rates in light of the recent macroeconomic updates on the global and local levels, especially the recent inflation figures.
The MPC has recently decided to keep its key current rates unchanged at 8.25 percent, 9.25 percent, 8.75 percent, and 8.75 percent for overnight deposit rate, overnight lending rate, and discount rate, respectively.
In its last meeting in 2021, held on 16 December, the CBE said that Egypt’s inflation readings were still below the bank’s target of inflation through the fourth quarter (4Q) of 2022, set at seven percent (±2 percent).
In December 2020, the CBE reset the inflation target at seven percent (±2 percent), down from nine percent (±2 percent).
Analysts and banking experts’ expectations support that the CBE would raise the interest rates in 2022 amid the ongoing global inflation wave and the looming tightining policy the US Federal Reserve (FED) is expected to approve in 2022 to deal with the rising inflation and the pandemic's severe impacts.
Following its latest meeting in December, the FED maintained interest rates, hinting it would raise interest rates by up to three percent in 2022.