The inflation rate has gone down to 9.8% in May from 12.2% in April, a decline of 2.4%. Meanwhile, analysts differed about the Central Bank's decision to reduce the interest rate, which is expected to be announced at its meeting on June 25. Major-General Abu Bakr el-Guindi, Head of the Central Agency for Public Mobilization and Statistics (CAPMAS), said price rises in urban areas went down to 10.2% in May from 11.7% in April, the lowest level in 16 months. He said fruit prices went up by 24.5%, vegetables by 33.4%, fish by 19.7%, and milk, cheese and eggs by 19.9%. Experts attributed this to the producers being optimistic due to the statements by the officials that Egypt is far from the global economic crisis. Riham el-Dessouki, senior analyst of Pelton Financial, expects more price hikes in the summer with the approach of Ramadan. Professor of Economics, Dr. Fakhri el-Fiqi, said the Central Bank may reduce the interest rate once again against the backdrop of a declining inflation, although the current rate is not good enough for depositors. In May, the Central Bank cut the interest rate for one-night deposits by 50 points to 9.5% and for one-night loans by 100 points to 11% in order to encourage lending.
