Inflation dips slightly in March to 5.1%: Annual urban inflation cooled to 5.1% in March from 5.3% in February, according to Capmas data out on Thursday. Price growth increased 0.6% on a monthly basis compared to 0.8% during the same month last year, and zero in February. This is the second consecutive month that inflation has slowed after three months of acceleration.

Food and transport prices were primarily responsible: The prices for food and beverages rose 0.8 percentage points in March to register an overall drop of 3% on an annual basis. Transport costs dropped by 1.3% to reach an annual rate of 13.4%. The uptick in food and beverage prices is likely a combination of increased demand from consumers stocking up on food since the outbreak of covid-19 and the usual increase that precedes Ramadan, says Sigma Capital’s Abu Bakr Imam.

Core inflation falls slightly: Annual core inflation remained effectively flat at 1.9% in March, while monthly core prices rose 0.2% from the month before, according to figures released by the Central Bank of Egypt (pdf).

What’s the outlook for inflation? The analyst jury is still out. HC Securities anticipates inflation accelerating 1% every month to reach 11.45% by December, which is above the government’s projection of 9.8%. Beltone’s Alia Mamdouh sees relatively tame inflation figures over the course of the year that she expects will be within the CBE’s target range.

Expect the CBE to hold rates next month: With inflation relatively contained and expected to remain within the CBE’s 9% (+/-3%) target range, the central bank is expected to keep rates on hold when its Monetary Policy Committee meets on 14 May, says Beltone’s Mamdouh. The MPC left rates unchanged at its meeting last week after its exceptional 300 bps rate cut last month in a “preemptive decision” that was made to provide “appropriate support” to the economy amid the covid-19 outbreak.