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Sunday, 25 September 2016

Central Bank of Egypt bucks expectations, leaves rates on hold

CBE LEAVES RATES ON HOLD: The Central Bank of Egypt’s Monetary Policy Committee “unexpectedly” left its overnight lending and deposits rates unchanged. “The current level of inflation and future upside risks are largely explained by transitory cost-push factors, while demand-side factors continue to pose downside risks to the inflation outlook. Given the balance of risks, the MPC judges that the key CBE rates are currently appropriate,” the Central Bank said in a statement (pdf). The overnight deposit stands at 11.75% against a Bloomberg survey expectation of 12.25%. All 12 economists surveyed by Reuters expected a rate hike, putting it in the range of 50-200 basis points. The move comes despite headline inflation rising to 15.47% year-on-year in August, from 14% in July, while core inflation rose to 13.25% last month against 12.31% in July.

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