The Central Bank of Egypt (CBE) will likely raise interest rates by 3% at the Monetary Policy Committee (MPC) meeting on March 30, Egypt Independent newspaper reported, citing an HSBC report.

The MPC left the overnight deposit rate, overnight lending rate, and the rate of the main operation intact at 16.25%, 17.25% and 16.75% percent, respectively, in its first meeting in February.

Last year, the apex bank increased interest rates four times to 8%.

According to HSBC, the interest hikes will put more burden on borrowing and slow growth rate.

The CBE must follow an inflation-targeted monetary policy to have a real return on investment in the Egyptian pound, the bank added.

HSBC said the real return on investment currently stands at -15 percent against inflation; therefore, the CBE will have to follow a "very stringent" monetary policy.

Earlier this month, Goldman Sachs Group projected that the CBE would raise interest rates by nearly 300 basis points during its upcoming MPC.


(Editing by Seban Scaria)