JUNE urban inflation figures rose slightly to 10.66 per cent up from 10.59 per cent in May. Urban inflation -- also known as the headline consumer price index (CPI) and published by the Central Agency for Public Mobilisation and Statistics on Saturday -- is the most closely watched indicator of prices. The latest increase is attributed to increased prices of food and beverages that make up around 40 per cent of a basket of goods used to measure inflation. The trend is expected to continue at least for the coming three months, spurred by increased summer spending coupled with the approach of the holy month of Ramadan when Egyptian families are known to increase spending, as well as the beginning of the school year. Inflation has dropped significantly since August 2008 when it hit 23.6 per cent. Since the beginning of 2010, inflation has been fluctuating but has not surpassed 14 per cent. This prompted the Central Bank of Egypt (CBE) to keep the overnight deposit rate and overnight lending rate unchanged since November 2009. During its last meeting on 17 June 2010, the CBE kept overnight deposit rate and overnight lending rate at 8.25 per cent and 9.75 per cent respectively. The discount rate was also kept unchanged at 8.5 per cent.
