CBE leaves interest rates on hold: The central bank’s Monetary Policy Committee left the country’s key interest rates unchanged during its Thursday meeting. Rates remain at 18.75% for overnight deposits and 19.75% for overnight lending. The discount rate also remained unchanged at 19.25%, the CBE said in a statement. The MPC acknowledged improvements in economic conditions in recent months — driven mainly by tourism, trade, natural gas, construction, and non-petroleum manufacturing — but said “the inflation outlook remains in line with achieving the inflation target. Against this background and given the continuation of tightening real monetary conditions, the MPC decided that current policy rates remain appropriate at this juncture.” Economists polled by Reuters last week had predicted that rates would remain on hold, explaining that inflation has not yet reached levels that would warrant a decrease in borrowing and lending costs, especially as the government is working toward reaching a 13% inflation rate by 4Q2018. The MPC has raised interest rates by a total 700 bps since the EGP was floated last year in a bid to help curb soaring inflation levels, which only began to cool in August, when core inflation slowed to 34.86%, from 35.62% in July, and annual headline inflation declined to 31.9%, from 33.0% the month before.

…Separately, foreign debt rose 42% y-o-y to USD 79 bn in FY2016-17 from USD 55.8 bn in FY2015-16, the central bank announced in its 2016 Financial Stability Report. The increase comes mainly from low-cost, long-term facilities, according to the report, which says that the figure “remains within safe levels by international standards, as it’s still below global net foreign reserves” at 39% of the total. Institutional loans from foreign and regional lenders are up by USD 7.7 bn, those from treasuries and bonds are up by USD 5.5 bn, while short-term loans are up by USD 5.3 bn. The Finance Ministry is planning to issue USD 7 bn in eurobonds in FY2017-18.

The central bank will announce FX reserve figures for September “within days,” according to Youm7. Net international reserves had reached their highest point ever in July, jumping to USD 36 bn.