Inflation and interest rates are on our minds this week after core and headline inflation both broke above 12% in May, according to figures released by the Central Bank of Egypt on Thursday. Headline inflation rates accelerated to 12.30% in May from 10.27% the month before; food prices typically rise significantly heading into Ramadan, and EFG Hermes’ Mohamed Abu Basha told Bloomberg that the pass-through effect of devaluation also played a role. Core inflation (which excludes fruits and vegetables) was also up, rising to 12.23% in May from 9.51% in April; that’s the highest core inflation reading since 2009, Bloomberg notes, quoting Abu Basha saying rising medicine prices played a role.

The inflationary spike comes in the same week as both the U.S. Fed and the CBE are due to meet to review interest rates. The U.S. Federal Open Market Committee meets to discuss interest rates this coming Tuesday and Wednesday (14-15 June), with the Central Bank of Egypt’s Monetary Policy Committee due to do the same on Thursday.

Analysts are so-far evenly divided on whether the CBE will hike rates: Reuters quotes Arqaam’s Reham El Desoki as forecasting a 50 bps bump in rates on Thursday, saying, “We expect annual headline inflation will remain high in the coming months, possibly registering 14-15 percent in the remainder of the year.” Beltone’s Shady Fakhoury, on the other hand, echoed many in the banking world as he noted the CBE is “unlikely to raise rates … due to the risk that it would increase treasury yields and further widen the government’s fiscal deficit,” Bloomberg says.

The CBE raised rates 150 bps in March to curb inflation after it allowed a 14% devaluation, but held rates steady at its last meeting on April 28.