Egypt’s inflation rate rose to 12.1% as the country’s foreign exchange reserves dwindled.

Egypt’s annual inflation rate hit 12.1% in March, official figures showed on Sunday, while the country’s foreign exchange reserves fell by $4 billion in the same month, the bank said. central. “In March 2022, the annual headline inflation rate was 12.1%, compared to 4.8% the previous month,” the Central Agency for Public Mobilization and Statistics (CAPMAS) said in a statement. The current statistic represents an increase of more than 2% from the 10% inflation rate recorded in February, which was already near its highest level in three years.

CAPMAS attributed the latest rise to a spike in food prices, in particular an 11% increase in the prices of bread and cereals and a 36.2% increase in the price of cooking oil. It comes after the Central Bank of Egypt said on Thursday that foreign exchange reserves had shrunk by $4 billion, recording $37 billion at the end of March 2022, from $41 billion in February. He attributed the decline to his mobilization of foreign exchange reserves “to calm the markets” following the war in Ukraine.

This comes less than three weeks after the Egyptian pound depreciated against the dollar, losing around 17% of its value in one day. The most populous country in the Arab world has been hit by mounting economic pressures since Russia’s invasion of Ukraine in late February sent global commodity prices soaring. As the world’s largest wheat importer, Egypt depended on the two countries for 85% of its supply, as well as 73% of its sunflower oil.

Egypt has put in place a series of measures to mitigate the economic fallout from the conflict, including announcing a $7 billion relief package to protect the most vulnerable in society. She also announced that she was applying for a new loan from the International Monetary Fund. Last month, its regional ally Saudi Arabia deposited $5 billion directly into Egypt’s central bank. According to the World Bank, a third of Egypt’s 103 million people live in poverty, and almost the same number are at risk of falling into poverty.

Summary of news:

  • Egypt’s inflation rate rose to 12.1% as the country’s foreign exchange reserves dwindled.
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