CAIRO (Reuters) -Egypt’s central bank on Thursday raised its key overnight interest rates by 200 basis points, seeking to contain inflation expectations after prices soared by their quickest in three years.
The bank’s Monetary Policy Committee (MPC) increased the deposit rate to 11.25% from 9.25% and the lending rate to 12.25% from 10.25%, it said in a statement accompanying the decision.
Prices were pushed up in part by a currency depreciation and after the Ukraine crisis pushed up wheat prices, the statement said.
“The MPC decided that raising policy rates is necessary to contain inflationary pressures which is consistent with achieving price stability over the medium term,” it said.
Eighteen analysts polled by Reuters had expected the bank to raise the median deposit rate to 11.00% and its lending rate to 12.25%.
The MPC cited an increase in annual urban inflation to 13.1 percent in April 2022 from 10.5 percent in March 2022, its highest since May 2019.
The bank also increased its discount and credit rates by 200 basis points to 11.75%, the statement said.
(Reporting by Mahmoud Mourad, Yasmin Hussein and Lilian Wagdy; Writing by Mahmoud Mourad and Patrick Werr; Editing by Angus MacSwan)
