Egypt's central bank raised the overnight deposit rate, overnight lending rate and the rate of the bank's main operation by 100 basis points to 9.25 percent, 10.25 percent, and 9.75 percent, respectively.
The decision made by the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) on Thursday aims to contain inflation, expected to increase in July as a consequence of price increases on subsidised fuel and electricity.
Monthly urban inflation increased by 1 percent in June compared to a decline of 0.7 percent last month. However, annual inflation remained unchanged at 8.2 percent in June, pushed by an increase in food prices ahead of the holy Islamic month of Ramadan.
"Against this background and given the balance of risks, the MPC judges decided that a pre-emptive rate hike is warranted to anchor inflation expectations and hence limit a generalised price increase, which is detrimental to the economy over the medium-term", the MPC said in a press release