Inflation unexpectedly cooled in April: The annual headline rate of inflation fell to 13.0% in April from 14.2% in March, the lowest rate since the start of the year, according to central bank figures (pdf). Data shows that month-on-month inflation fell to 0.5% last month from 0.8% in March, while annual core inflation fell to 8.1% in April after hitting 8.9% in the previous month.

Thank state intervention pre-Ramadan? “The monthly inflation figures were lower than our expectations, probably driven by the discounted food items the government released in the market pre-Ramadan,” Pharos said in a report. Food and beverage prices fell to 12.8% from 15.1% on an annual basis, and to 0.3% from 1.5% month-on-month, CAPMAS data showed (pdf). Rising demand pre-Ramadan generally helps drive inflation in the run-up to the holy month.

Expect inflation to rise once again in the coming months as the Sisi administration scraps fuel subsidies and introduces a new fuel pricing mechanism; both will put upward pressure on prices. Pharos is forecasting a 3% m-o-m rise in both June and September on the back of these policies, as well as the annual back-to-school season which usually produces a 1% rise during the month. On an annual basis, the investment bank sees inflation sitting between 12.5% and 13.5% between now and September.

Could the unexpected cooldown precipitate a rate cut? The latest figures are unlikely to have an impact on the central bank’s monetary policy decisions going forward, Pharos says, maintaining its prediction of a 100-200 bps interest rate cut in 4Q2019. The central bank next meets to review rates a week from Thursday.