Egypt will likely resume its tightening monetary policy soon after inflation in urban areas rose to its quickest level since November 2018, driven by soaring food prices. Consumer prices jumped 14.6% in August from the same month last year, compared with 13.6% in July, according to Egypt’s official statistics agency, CAPMAS.

The inflation figures came in line with investment banks’ estimates, which expected it to range between 14.4% and 14.6% on an annual basis. Youssef El-Banna, a financial analyst at Naeem Capital, said the rise “is due to the increase in the prices of vegetables, grains and oils.” Egypt has been hit hard by the soaring oil and commodity prices, with the Egyptian pound devaluing against the dollar.

Rampant inflation, fuelled by the pound depreciation and the war’s repercussions, will likely urge the CBE to restart its monetary tightening. Egypt has witnessed cumulative 300 bps rate hikes since March, all under former CBE governor Tarek Amer, who resigned last month and was succeeded by Hassan Abdullah. Currently, overnight deposit and lending rates stand at 11.25% and 12.25%, respectively.