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26 February 2024

Egypt central bank raises rates, cites food prices

By Agencies


Egypt's central bank raised its key overnight interest rates by 25 basis points on Friday, the first change in more than a year, citing higher food prices and pressure from rising economic growth.

The bank said it raised its overnight deposit rate to 9 percent and the lending rate to 11 per cent.

"This decision has been induced by the persistent increase in food inflation and expected upward pressure over the coming period," the bank said in a statement.

High international food prices had led to domestic food price inflation, which had in turn caused non-food prices to rise, the bank said.

The bank also said faster economic growth had spread beyond the manufacturing and construction sectors and could put further upward pressure on prices. "Other sectors have started to record higher growth rates that may precipitate more inflationary pressures," the bank said.

Egypt's economy grew 7.1 per cent in the fiscal year ending last June, its fastest rate in at least two decades.

Consumer prices in urban areas rose 6.9 per cent in the year to December, unchanged from the year to November, the government said in January. (Reuters)