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Central bank expected to keep key rates unchanged

Thursday 28 June 2018 01:01 PM

The Central Bank of Egypt
The Central Bank of Egypt

Egypt's central bank is expected to keep its key interest rates unchanged at its next monetary policy meeting, a Reuters poll showed on Wednesday, following sharp increases in fuel and electricity prices that are expected to edge inflation upwards.

Eleven economists polled by Reuters said the Central Bank of Egypt (CBE) was likely to maintain its deposit and lending rates at 16.75 and 17.75 per cent when it meets on Thursday.

"Following the announcement of an increase in prices in water, electricity and fuel, we expect inflation to rise again for several months and the monetary policy committee may lift rates for a short period in the autumn before then resuming the downward trajectory, as inflation falls," business and economic forecasting think-tank Signet Institute said.

Egypt this month announced a raft of new austerity measures, raising fuel prices by up to 50 per cent, electricity prices by an average of 26 per cent and nearly doubling the price of piped drinking water.