Egypt Hikes Rates in Sign IMF Deal, Devaluation May Be Near
- Regulator surprises with first monetary tightening in months
- Authorities in talks with IMF over expanded loan package
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Egypt raised interest rates for the first time since August, breaking expectations with a move that might speed up progress on a bigger rescue package with the International Monetary Fund and set the stage for another devaluation.
The Monetary Policy Committee increased its benchmark deposit rate by 200 basis points to 21.25% and the lending rate to 22.25%, according to a statement Thursday. Only Goldman Sachs Group Inc. and Morgan Stanley predicted a hike in a Bloomberg poll of economists, with the rest seeing no change.