The Central Agency for Public Mobilization and Statistics (CAPMAS) has revealed that Egypt’s annual urban consumer price inflation rate increased for the first time in five months to reach 3.6% in November from 3.1% a month earlier, Invest-Gate reports.

Consumer prices dropped 0.3% month-on-month, compared to a 1% hike in October, which is the lowest level since June. Accordingly, the annual core inflation, which strips out volatile and regulated items, slowed to 2.1% in November versus 2.7% in the previous month, according to an official statement on December 10.

“The slight rise year-on-year (YoY) was because of unfavorable base year impacts,” Yara Elkahky, an economist at Naeem Brokerage, recently told Reuters. “But it is good news and aligned with our estimate,” she noted.

Radwa El-Swaify, head of research at Pharos Securities Brokerage, also agreed that the news comes in line with expectations. According to Reuters, she foresees base-year effects to push inflation higher in December to record 6.5-7% YoY.

Likewise, Mohamed Abu Basha, head of research at Cairo-based investment bank EFG Hermes, told Bloomberg, “Inflation potentially settles at 6%-7% in December, providing room for the Central Bank of Egypt (CBE) to comfortably cut rates in the first quarter of 2020 by 50-100 basis points.”

The CBE will probably hold interest rates at its December 26 meeting to wait for potential acceleration in December or January’s Consumer Price Index (CPI) figures, Abu Basha further explained to the American news agency.

Annual urban consumer price inflation had plunged for six consecutive months between May and October. Given this, the central bank has made three consecutive cuts to interest rates since August, slashing them by a cumulative 350 basis points.