Central Bank of Egypt keeps key interest rates ‘unchanged’

Egypt’s central bank has decided Thursday to keep its key interest rates unchanged in its first decision since it raised rates by 150 basis points last month.

The bank’s Monetary Policy Committee (MPC) kept the overnight deposit rate at 10.75 percent and the overnight lending rate at 11.75 percent, it said in a statement.

Egypt has been struggling to restore economic growth since a mass uprising in 2011 against veteran leader Hosni Mubarak ushered in a period of political uncertainty that has scared away tourists and foreign investors, the major sources of hard currency. Reserves have more than halved since 2011 to stand at $16.56 billion in March.

The central bank had been taking measures to support the pound but on March 14 it devalued the currency to 8.85 per dollar from 7.73. Two days later it strengthened it slightly to 8.78 per dollar as it adopted a more flexible exchange rate policy.

In an attempt to curb inflationary pressures after the devaluation, the central bank exceeded expectations and raised its overnight deposit rate to 10.75 percent from 9.25 percent and the overnight lending rate to 11.75 percent from 10.25 percent at its last meeting on March 17.

Eight out of 10 contributors to a Reuters poll had said they expected the committee to keep rates unchanged on Thursday, while two contributors expected a hike.

Annual urban consumer inflation eased for the third consecutive month in March to 9 percent from 9.1 percent in February.

Source: Reuters