Egyptian interest rate intrigue may hold clues to what is ahead

Egyptian interest rate intrigue may hold clues to what is ahead

Egypt’s central bank is plotting out its next moves on interest rates to get a grip on inflation that only threatens to get worse because of depreciation pressure on the pound.

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The fastest increases in consumer prices since 2018 mean monetary tightening is likely to resume this week. But the market is also on the lookout for more guidance from policy makers, with the currency still weakening and in the spotlight after its devaluation earlier this year.

Though economists are divided over what the central bank will do on Thursday, a survey by Bloomberg found most expect a hike of 50 to 100 basis points. The Monetary Policy Committee has kept the benchmark deposit rate at 11.25 percent for two meetings.

“More than just the decision on rates, the market will be looking for clues about broader monetary policy directions and any hints about the central bank’s future moves, said Mohamed Abu Basha, head of macroeconomic research at investment bank EFG Hermes. “A 100 basis-point hike seems warranted.

Policy makers are gathering under the leadership of Hassan Abdalla, who became acting governor last month after Tarek Amer’s surprise resignation just a