Egypt’s central bank keeps benchmark interest rates unchanged

Egypt's central bank kept its benchmark interest rates unchanged on Thursday as it balances the needs to manage high inflation with encouraging economic growth, the bank said in a statement.

The bank's monetary policy committee kept the overnight deposit rate at 8.75 percent while the overnight lending rate stayed at 9.75 percent, the bank said in a statement

Four out of six economists polled by Reuters had forecast that the bank would keep interest rates on hold, while two predicted a rate cut.

In a statement, the bank's sub-governor for monetary policy noted that GDP growth had quickened and annual inflation rates were easing, but risks remained to both measures of the economy's health.

"At this juncture, the MPC judges that the key (central bank) rates are currently appropriate, given the balance of risks surrounding the inflation and GDP outlooks," Rania al-Mashat said.

The bank surprised analysts with a 50 basis point cut last month, after holding rates steady since July, when it hiked the benchmark rates by 100 basis points.

While another rate cut could boost investor confidence ahead of an economic summit next month and lend some momentum to a nascent recovery, tackling inflation remains the bank's main priority, most analysts said.

Inflation slowed last month but remains high. Urban consumer inflation fell to 9.7 percent in January from 10.1 the previous month.

Core inflation, which excludes volatile items such as fruit and vegetables, declined to 7.06 percent in January from 7.69 percent the previous month.

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