Interest rates unchanged

THe central Bank of egypt (cBe), bucking analyst expectations, left its overnight interest rates unchanged on Thursday, saying it believed inflation was under control over the medium term.

The bank also raised the reserve ratio to 18% from 14%, saying that this would help tighten liquidity.

The bank's Monetary Policy committee (MPc) kept the deposit rate at 11.25% and its lending rate at 12.25%, it said in a statement.

A poll of 15 analysts had forecast that the bank would raise rates by 100 bps.

The MPc said that although inflation was high, it was lower on a month-to-month basis than it had been in March and April and was being driven mainly by supply-side issues, particularly international commodity prices.

“Therefore, the MPc concurs that the current key cBe rates coupled with the increased required reserve ratio are consistent with achieving price stability over the medium term,” it said in the statement accompanying the rates decision. —