Egypt Keeps Rates Steady

Egypt’s central bank left its main interest rates unchanged, saying a second quarter of strong GDP growth and an expected decline in inflation to single digits meant its monetary targets were on course, Reuters reported. The bank kept its overnight deposit rate at 16.75% and its lending rate at 17.75%, a move predicted by all 12 economists polled by Reuters earlier this week. The bank’s Monetary Policy Committee said GDP had grown by 5.4% for a second quarter in a row and that its target for headline inflation remained on track despite rising to 13.5% year-on-year in July from 11.4% in May.  The government in June raised electricity and fuel prices, with petrol increasing by up to 50%. It also sharply increased the price of metro tickets in May. The committee said it expected inflation to fall to single digits after the fiscal shocks had worked their way through the system. “The MPC decided that keeping key policy rates unchanged remains consistent with achieving this inflation outlook and target path,” it said in a statement released after the Thursday meeting.