Egypt’s baseline inflation has reached 29.6 per cent in January, while core inflation hit 30.8 per cent in the same period, according to data from the Central Agency for Public Mobilisation and Statistics (Capmas).

Inflation levels have continued to rise since Cairo decided to float its currency on 3 November, which saw the Egyptian pound devalue by almost 60 per cent against the US dollar.

The central bank could increase interest rates as a response to the continued increase in inflation says UK-based Capital Economics in a recent research note that “we now expect a 100-basis point hike in the overnight deposit rate,” when the central bank meets on Thursday to decide on the matter.

With inflation showing no signs of slowing down, the cost of living is set to further increase as the government plans its latest round of subsidy cuts. The Minister of Electricity recently announced a hike in electricity prices by July this year.

The flotation of the pound and the lifting of subsidy cuts are part of wider economic reforms adopted by Cairo in late 2016 in order to secure a $12bn loan from the Washington-based International Monetary Fund (IMF).

In addition to the currency flotation and the lifting of state subsidies, the IMF loan offered hope to foreign and local investors that the government is getting serious about wider economic reforms, which include dealing with key investment barriers such as the ease of doing business.

Cairo has yet finalised the latest version of its updated investment law, which the authorities say has been developed to favour the private sector companies looking to business in Egypt.