CAIRO: Urban consumer inflation in Egypt remained unchanged in the year to October, a sign the central bank is unlikely to raise interest rates in December.
Inflation in the 12 months to October was 11 percent, the state statistics agency CAPMAS said on its website on Wednesday, on the higher end of analysts forecasts.
Six analysts cited forecasts for urban inflation — the most closely watched indicator of prices — that ranged from 10.5 percent to 11.1 percent. The average of the forecasts was 10.83 percent.
"The rate is slightly below our estimates … It is probably because food prices eased a bit in the year to October," said Alia Mamdouh, economist at CI Capital Research, who had forecast inflation would rise to 11.1 percent.
"I think the central bank is going to hold interest rates steady in December," she added, estimating a rate hike could be introduced by the middle of 2011.
The central bank on Thursday kept its key overnight interest rates steady at a four-year-low, saying non-food inflation was largely subdued and global economic growth was uncertain.
It held its overnight lending rate steady at 9.75 percent and the deposit rate at 8.25 percent, its ninth pause since it stopped lowering rates in September 2009. It also left the discount rate unchanged at 8.5 percent.
Prices of food and beverages, which account for 44 percent of the weighting of the basket Egypt uses to measure inflation, slightly dipped to 19.3 percent in the year to October, from 21.3 percent in September.
Although urban inflation has fallen from a peak of 23.6 percent in August 2008, it reignited late last year, climbing to as high as 13.6 percent in January.
A Reuters poll of 12 economists predicted GDP growth would reach 5.5 percent in fiscal year 2010/11, up from 5.2 percent in the year that ended in June.
Egypt last month revised down its gross domestic product growth figure for the April-June quarter to 5.4 percent from a previously stated 5.9 percent.
The next policy meeting of the central bank’s Monetary Policy Committee is scheduled for December 16.
