Analysts expect inflation in March to come in between 14% and 15%, driven by the dollar’s unprecedented rise against the Egyptian pound and higher fuel prices caused by the Iran-Israel war. The renewed price pressures are expected to slow the monetary easing cycle the central bank has followed since April 2025.
Inflation had been easing since February 2025 after reaching elevated levels over the previous two years, falling to 10.1% in January before rising again in February on higher meat and vegetable prices during Ramadan. March inflation is now expected to climb further, reversing part of that decline.
This week, the dollar rose above 52 pounds for the first time, driven by heavy foreign capital outflows from Egypt’s debt market, while the Petroleum Ministry announced increases in all fuel prices and cooking gas cylinders after global energy prices climbed because of the war, now in its 13th day.
Esraa Ahmed, a macroeconomics analyst at Thndr Securities, told Al Manassa that inflation could reach 15% in March, according to preliminary estimates, unless the dollar exchange rate changes during the month. Heba Monir, banking and macroeconomics analyst at HC Securities and Investment, expected March inflation to rise to 14.3% year on year and 2.4% month on month. Mina Rafik, a macroeconomics analyst at Prime Investments, also said annual inflation in March would likely come in at about 15%.
Ahmed said the latest fuel-price increases would put upward pressure on most inflation components, especially food, because of higher diesel costs for transport and production. Poultry prices have jumped in recent days as feed costs increased, which traders attributed to the impact of the Iranian war.
“Inflationary pressures are compounding and coinciding with the pound’s weakness against the dollar, adding another inflationary wave linked to higher import costs,” Ahmed said.
Rafik told Al Manassa that higher fuel prices are one of the main factors pressuring inflation at present because of their direct effect on transport and production costs, which will be reflected in the prices of a large number of goods and services, especially food.
Global oil prices remain an important factor in the path of domestic inflation, he said, adding that continued uncertainty linked to geopolitical tensions could keep inflationary pressures in place even if oil prices see temporary declines.
Global oil prices have swung sharply in recent days, with Brent futures reaching $118 a barrel this week before falling to $84 and then rising again to $100.
Against that backdrop, Ahmed said the central bank is likely to temporarily pause its monetary easing cycle and hold rates steady until it can assess developments, especially given the high volatility currently hitting markets.
The central bank cut interest rates by 8.25 percentage points between April 2025 and February 2026, bringing rates back to more moderate levels after an aggressive tightening cycle that began in 2022 to contain soaring inflation.
Rafik agreed, saying the Central Bank of Egypt was likely to hold interest rates at its monetary policy committee meeting scheduled for April 2, pending more clarity on inflation trends and the global economic outlook.
He added that if geopolitical tensions persist for longer, the central bank may later reconsider its interest-rate path and raise rates at the end of the year.
