File Photo: Central Bank of Egypt's headquarters in Cairo (Photo: Reuters)
Egypt’s central bank kept interest rates unchanged as expected on Thursday, concluding that further declines in inflation were needed to warrant a shift towards a looser policy.
The bank, which has raised interest rates by 700 basis points since the flotation of Egypt’s pound currency last November, held the overnight deposit rate at 18.75 percent and the overnight lending rate at 19.75 percent.
Egyptian inflation dipped for the third month running in October but remained above 30 percent.
The bank said the baseline inflation outlook remained consistent with achieving its inflation targets of 13 percent in the fourth quarter of next year and single digits thereafter.
“Against this background, the MPC (policy committee) decided that current policy rates remain appropriate,” it said in a statement.
Nine of 10 economists polled by Reuters on Tuesday had predicted the MPC would hold rates for the third month in a row.
They saw rates being cut in coming months as inflation continued to ease.
The Egyptian pound has lost half of its value since it was floated as part of a $12 billion International Monetary Fund programme aimed at reviving the economy.
Authorities hope the IMF deal will help revive an economy that has been struggling since a 2011 uprising drove tourists and investors away.