Goldman Sachs Group projected that the Central Bank of Egypt (CBE) would raise interest rates by nearly 300 basis points (bps) during its upcoming Monetary Policy Committee’s (MPC) meeting on March 30th, Bloomberg reported on March 10th.

The American investment bank expected interest rates to increase due to February’s inflation that exceeded forecasts.

“Containing inflation expectations and, in particular, improving domestic FX liquidity to ease chronic pressure on the Egyptian pound will require the CBE to pursue tighter monetary policy in the coming months,” Farouk Soussa, an economist at Goldman in London, said in a report.

During the first MPC meeting of this year, the CBE kept interest rates on hold, leaving the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 16.25%, 17.25%, and 16.75%, respectively.

In 2022, the CBE hiked rates by 800 basis points (bps), of which 500 bps were in the fourth quarter of last year to tame the accelerating inflation.

 

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