According to the Egyptian Central Agency for Public Mobilization and Statistics (CAPMAS), the national inflation rate rose to 13.3 percent in cities during October, up from 10.8 percent the previous month. Consumer index prices in urban areas stood at 144.4 points in October, CAPMAS noted, up from 127.5 points in the same month last year. According to professor of economics and political science Alia el-Mahdi, rising inflation rates can be expected to increase daily costs of living for most households. This in turn will be reflected in higher poverty rates, she noted, pointing out that low- and middle-income households would be most affected. El-Mahdi went on to say that the Central Bank of Egypt (CBE) generally adopted low interest rates with the aim of offsetting inflation. She added that the CBE had stabilized the base interest rate, noting that current interest rates would help encourage growth and control inflation in the medium term. Ola el-Hakim, former director of the state-run Institute for Planning and member of the Shura Council (the consultative house of parliament), warned of a possible rash of withdrawals by bank depositors following the announcement of lower interest rates. This would lead to reduced liquidity for lending, said el-Hakim, especially since small individual depositors represent some 60 percent of the cash liquidity available to banks. She went on to say, however, that it would be difficult for the CBE to raise interest rates given its tendency to expand investment-oriented lending. Notably, the CBE's main inflation index reached 6.3 percent in September. Translated from the Arabic Edition.
