The Central Bank of Egypt (CBE) has decided to keep interest rates unchanged,  after the bank's Monetary Policy Committee (MPC) met on Thursday.

The bank kept the overnight deposit rate, the overnight lending rate, and the rate of the CBE's main operation unchanged at 8.75 percent, 9.75 percent, and 9.25 percent respectively, read the CBE's statement. 

The discount rate remained at 9.25 percent. 

The latest pick up in inflation ruled out an interest rate cut at today's meeting said Jason Tuvey, senior economist at Capital Economics, in a statement.

A spike in Egypt's inflation rate in May lowered the chances that the CBE would cut interest rates, despite expectations for inflation to fall back in the coming months, Jason Tuvey, economist at Capital Economics said in a statement on Wednesday.  

Egypt’s annual headline inflation hit a five-year peak in May at 13.11 percent compared to 10.96 percent in April.

"While the central bank doesn’t have an official inflation target, policymakers have previously suggested that they are more comfortable with inflation in single digits," he explained.

Tuvey however expects an interest rate cut of 50 basis points later this year, as the effects of last year's energy price hikes unwind in July, causing inflation to fall back, though the MPC might be reluctant to lower rates if inflation remains in double digits.

The MPC has yet to disclose the full statement explaining the decision.