Egypt Prices May Ease

The Egyptian pound recovered about 5 percent of its value, bringing the dollar down to around 53.7 pounds after it had exceeded 56. But this did not lead to a rapid drop in the prices of goods. Two economists attributed this to traders basing prices on dollar rates in forward contracts and on the highest level the dollar had reached, as well as expectations that the pound would continue to weaken, production costs, and hedging against future risks. The capital cycle for some goods can take about three months. Annual inflation fell to around 12 percent in October, from 12.8 percent in September. But the experts stressed that an improved exchange rate alone is not enough to bring prices down.

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