The Egyptian economy has recently witnessed a successive rise in inflation rates, exceeding all historical levels, affecting all sectors of the national economy. Therefore, the current study aimed to evaluate the response of domestic inflation rates to exogenous shocks, which represented in changes in both the real exchange rate and oil prices. It also aimed to assess the performance of monetary and fiscal policies in containing inflationary trends. To achieve the study's objective, the autoregressive distributed lag (ARDL) and nonlinear distributed lag (NARDL) model was applied to quarterly data from (2005Q2-2024Q1). This is to monitor the short-term dynamics and long-term relationships between the inflation rate and the internal and external factors affecting it. They’re, the real exchange rate, oil prices, discount rate, and short-term government debt. The results revealed statistically significant asymmetric effects of the real exchange rate on inflation in both the short and long runs. The asymmetry in the impact of oil prices on inflation was also verified. The results showed that the transmission of global oil prices to domestic inflation rates did not achieve the expected results due to the subsidies policies pursued by successive governments, in addition to the inflexibility of domestic price in their downward trends. The results also revealed the contribution of fiscal policy to the inflation rates achieved at a statistically significant level of 5%. The results also indicated that restrictive monetary policies, represented by raising the discount rate, did not succeed in reducing the inflation rate during the study period.