Egypt Inflation Rises to a 4-Year High at 14.6%

The Ethereum blockchain is set for Proof-of-Stake (PoS) following the final shadow fork testing for the transition.

A shadow fork is when a portion of the blockchain is tested to make sure it will hold up to some of the permanent changes that are coming to Eth 2.0. The final test was completed on September 9 2022. It was the 13th since the first shadow fork in April 2022.

Besides the shadow forks, Ethereum has also been transitioning several testnets to Proof-of-Stake as they prepared for the Merge. The last testnet to transition was the Goerli testnet which merged on August 11 2022.

Goerli is one of 3 dedicated testnets, clones of the Ethereum blockchain, and typically offer a free environment for users to try out $ETH transactions and services. In a shadow fork however, tests are carried out on a version of the mainnet.

The shadow fork merges data from the execution layer and consensus layer to create another testnet.

Below is a further explanation by Ethereum Core Developer, Tim Beiko:

“Shadow forks give us a more realistic environment to test in than launching new testnets because existing testnets already have transactions happening organically on them, and a large state size and block history which put nodes under more stress than new testnets.”

The shadow-fork test took place without issue as was confirmed in a tweet by infrastructure company, Nethermind:

Transition in Mainnet-Shadowfork-13 (the last shadowfork before The Merge) was successful for all Nethermind nodes!#TheMerge #Ethereum #Nethermind #MSF13 pic.twitter.com/sddPPwSR1u

— Nethermind (@nethermindeth) September 9, 2022

Nethermind is one of the makers of client software that validators require to run Ethereum nodes, versions of the Ethereum network on their computers. Other client software includes:

• Nethermind
• Erigon

One objective of the shadow fork is to make sure that the client software can run the nodes without any issues following upgraded code.

The reasons for the fork include the following:

• Practice running nodes
• Deploying contracts
• Testing the infrastructure

The forks help developers to see how upgrades will affect the blockchain ahead of the real merge that is expected around September 14-15, 2022.

You can read a full explainer on the Merge here.

Watch the video below as Vitalki Buterin, Founder of Ethereum, as he discusses viable ideas and solutions that can be built on Ethereum 2.0.

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Egypt’s annual inflation rate rose to 14.6% in August 2022 driven by increasing food and beverage prices, the highest since November 2018.

Food and beverage costs soared to 23.1% according to Egypt’s official statistics agency, CAPMAS. On a monthly basis, price growth slowed to 0.9% from 1.3% in July 2022. Prices had increased by 13.6% in July 2022.

While the government raised fuel prices in July 2022, it said the country is leaving bread subsidies unchanged for now. Authorities hoped to cut spending on the subsidies for Egypt’s staple food consumed by about 70% of the country’s over 100 million residents.

Inflation has quickened for months, also driving up interest rates and making the country’s securities less favourable to foreign investors.

Since September 2021, annual inflation figures released every month have increased by 8% as the chart below indicates:

The local Pound, which the government devalued by more than 15% in March 2022 at the onset of the Ukraine-Russia war, has continued to fall reaching around 19.30 against the US dollar, reports indicate.

The war in Ukraine, the elevating global inflationary wave, the US Federal Reserve’s tightening policy and supply chain disruptions have affected the Egyptian economy, adding pressure on its reserves of hard currency, and the pound losing about 20% to the dollar since the war.

Reports also indicate a shortage of dollars in Egypt which is expected to increase, pushing further rises in the exchange rate if the government eases restrictions on imports.

The Central Bank of Egypt Monetary Policy Committee (MPC), which has raised interest rates by 300 basis points since March 2022, is expected to meet on September 2022 for further deliberations.

The benchmark lending rate was however maintained at 11.25% in the last two MPC sittings.

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