Egypt Central Bank Unexpectedly Keeps Interest Rates Unchanged

  • Overnight deposit rate kept at 11.75%; survey estimate 12.25%
  • Inflation at a seven-year high led to expectations for a raise

Egypt’s central bank unexpectedly kept interest rates unchanged, even after inflation soared to the highest level since at least 2009.

Policy makers left the overnight deposit rate at 11.75 percent, the central bank said in a statement on Thursday. Five of eight economists in a Bloomberg survey said the bank would raise rates, while only three predicted a hold. The overnight lending rate remained at 12.75 percent.

Egypt is awaiting final approval for a $12 billion, three-year International Monetary Fund loan to fund a government program to restore investor confidence, including subsidy cuts and a value-added tax. Inflation accelerated to 15.5 percent in August, and economists expect prices to rise even faster as the new measures take effect.

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