Egypt's annual urban consumer price inflation declined to 5.4 percent in December, down from 5.7 percent in November, the state-run Central Agency for Public Mobilization and Statistics (CAPMAS) reported.
Monthly urban headline inflation shrank to negative 0.4 percent, compared with 0.8 percent in November.
The Central Bank of Egypt (CBE) reported that the annual core inflation, which excludes volatile food and energy costs, hit 3.8 percent in December, compared with 4 percent in November, while the monthly core inflation remained at zero for two consecutive months.
Annual nationwide inflation hit 6 percent in December, down from 6.3 percent in November, while monthly nationwide inflation came in at negative 0.5 percent, compared with 1.1 percent, CAPMAS said.
The nationwide inflation rate for 2020 registered 5.1 percent, compared with 8.5 percent in 2019.
The CBE's monetary policy committee (MPC) will hold its first meeting for this year on February 4.
The CBE slashed interest rates by a total of 400 basis points (bps) in 2020, where an emergency 300 bps cut was made in March and was followed by two consecutive cuts of 50 bps each in September and November.
In December, the central bank set a new inflation target at an average of 7 percent (±2 percentage points) for the fourth quarter of 2022.
The CBE was targeting an inflation of 9 percent (±3 percentage points) on average in the fourth quarter of 2020, and it said that the average inflation in the fourth quarter of 2020 was likely to come under its target floor of 6 percent.
Beltone Financial expected the CBE to keep interest rates unchanged in the coming February meeting, but predicted a 50-bps cut to occur in the first quarter of 2021, the investment bank said in a report yesterday.
Beltone also expects inflation to remain within the CBE's new inflation target for the fourth quarter of 2022.