CAIRO: Egypt’s headline inflation came in at under 4 percent in September, potentially triggering consultations with the International Monetary Fund (IMF) that could lead to lower interest rates.
Under a one-year, $5.2 billion loan agreement signed in June, Egypt committed to consult an IMF technical team if year-on-year inflation fell below 6 percent by the end of September and the IMF board itself if it fell below 4 percent.
In September, annual urban consumer price inflation edged up to 3.7 percent from 3.4 percent in August, the country’s statistics agency CAPMAS said on Saturday.
The low inflation rate sharpens a dilemma for the central bank: whether to keep interest rates high to sell treasury bills and protect the currency, or lower them to encourage growth in an economy battered by the COVID-19 pandemic.
Some economists have said that if inflation remains low, the IMF could argue the central bank’s monetary committee should consider lowering interest rates when it next meets on Nov. 12.
The slight increase in September inflation went against some analysts’ forecasts, who had expected the headline rate to be kept under pressure by lower food prices. However, CAPMAS said food costs increased by 0.3 percent month-on-month.
The August inflation rate was near the lowest since 2005.
Inflation soared to a peak of 33.0 percent in July 2017 after Egypt implemented IMF austerity measures including a fuel price hike, a 13 percent value-added tax and taxes on tobacco, while halving the value of the currency against the dollar.
Egypt’s September inflation of 3.7% could trigger IMF consultation
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Egypt’s September inflation of 3.7% could trigger IMF consultation
- Egypt earlier committed to consult an IMF technical team if year-on-year inflation fell below 6 percent by the end of September
Saudi Arabia’s foreign reserves rise to a 6-year high of $475bn
RIYADH: Saudi Arabia’s foreign reserves climbed 3 percent month on month in January to SR1.78 trillion, up SR58.7 billion ($15.6 billion) from December and marking a six-year high.
On an annual basis, the Saudi Central Bank’s net foreign assets rose by 10 percent, equivalent to SR155.8 billion, according to data from the Saudi Central Bank, Argaam reported.
The reserve assets, a crucial indicator of economic stability and external financial strength, comprise several key components.
According to the central bank, also known as SAMA, the Kingdom’s reserves include foreign securities, foreign currency, and bank deposits, as well as its reserve position at the International Monetary Fund, Special Drawing Rights, and monetary gold.
The rise in reserves underscores the strength and liquidity of the Kingdom’s financial position and aligns with Saudi Arabia’s goal of strengthening its financial safety net as it advances economic diversification under Vision 2030.
The value of foreign currency reserves, which represent approximately 95 percent of the total holdings, increased by about 10 percent during January 2026 compared to the same month in 2025, reaching SR1.68 trillion.
The value of the reserve at the IMF increased by 9 percent to reach SR13.1 billion.
Meanwhile, SDRs rose by 5 percent during the period to reach SR80.5 billion.
The Kingdom’s gold reserves remained stable at SR1.62 billion, the same level it has maintained since January 2008.
Saudi Arabia’s foreign reserve assets saw a monthly rise of 5 percent in November, climbing to SR1.74 trillion, according to the Kingdom’s central bank.
Overall, the continued advancement in reserve assets highlights the strength of Saudi Arabia’s fiscal and monetary buffers. These resources support the national currency, help maintain financial system stability, and enhance the country’s ability to navigate global economic volatility.
The sustained accumulation of foreign reserves is a critical pillar of the Kingdom’s economic stability. It directly reinforces investor confidence in the riyal’s peg to the US dollar, a foundational monetary policy, by providing SAMA with ample resources to defend the currency if needed.
Furthermore, this financial buffer enhances the nation’s sovereign credit profile, lowers national borrowing costs, and provides essential fiscal space to navigate global economic volatility while continuing to fund its ambitious Vision 2030 transformation agenda.
