February 2022’s inflation figures are out, & they’re pretttty high. Cue: rising interest rates.
Annual inflation rate for February 2022 rose to 8.8%, just shy of the CBE’s target ceiling of 9%, & way higher than market expectations of 8%. The CBE is expected to begin raising interest rates to tackle soaring inflation.
Food & beverage, which has by far the highest weight in calculating the consumer price index (40% weight), was the main driver behind the spike in inflation. And yes, Russia’s invasion of Ukraine played a big role.
In fact, Egypt’s Ministry of Trade banned the exports of whole & crushed beans, lentils, pasta, wheat, & flour for the next three months.
The CBE’s target inflation rate is between 5%-9%, & there are no signs of inflation slowing down anytime soon, locally or globally. Goldman Sachs expects the CBE to raise interest rates anywhere between 0.5% to 1% in its next meeting later this month, with another 0.5% hike in Q2.