Egypt: inflation to stay weak, more rate cuts on the way

The decline in Egyptian inflation to a 14-year low of 3.1% y/y in October raises the risk that the central bank lowers interest rates by more than the 100bp that we have pencilled in for Thursday’s meeting. Inflation is likely to rise from here, but we expect it to remain subdued and the central bank’s easing cycle will probably be a bit steeper than most currently anticipate.

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