Economics
Egypt Surprises With Jumbo Rate Hike to Tackle Inflation
- Central bank delivers biggest rate rise in nearly half-decade
- Egypt contends with price-spike, outflows from bond market
Photographer: Khaled Desouki/AFP/Getty Images
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Egypt surprised most economists by delivering its biggest interest-rate hike in nearly half a decade, an attempt to tackle soaring inflation and restore the allure of its local debt with foreign investors.
The central bank increased the deposit and lending rates by 200 basis points each to 11.25% and 12.25% respectively, the Monetary Policy Committee said Thursday in a statement. Only one economist in a survey of nine correctly predicted the decision, with most forecasting an increase of 100 basis points.