Egypt’s central bank raises key interest rates by 300 bps – Gulf Today

Egypt’s central bank raises key interest rates by 300 bps – Gulf Today

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Egypt’s central bank hiked overnight interest rates by a greater-than-expected 300 basis points, warning that inflationary pressures were building.

The rate hike may signal the central bank may be preparing for a further weakening of the currency.

The bank’s Monetary Policy Committee (MPC) raised the deposit rate to 16.25 per cent and its lending rate to 17.25 per cent, it said in a statement.

“The MPC judges that demand side pressures have recently increased,” it said, citing activity greater than the economy’s capacity, higher inflation numbers and faster growth of money supply.

A poll of 12 analysts had forecast the bank would raise rates by a median 200 bps.

The central bank most recently raised rates by 200 bps at a surprise meeting on Oct. 27, the same day it devalued its currency by 14.5 per cent and announced it had signed a $3