Egypt: rising inflation to keep easing cycle on pause

Egyptian inflation is likely to rise over the next 6-9 months due to stronger food and fuel inflation, as well as a weaker pound, which will prevent the central bank from resuming its easing cycle for much of this year. But a drop in inflation late this year should open the door again to rate cuts. We expect the policy rate to be lowered by 150bp by end-2022, whereas the consensus expects rates to be broadly stable.