‘Super Rate Hike’ Still Seen in Egypt as Devaluation Looms
- Central bank kept rates unpexectedly unchanged Thursday
- Inflation is at the highest level since at least 2009
Egyptian fifty pound notes are displayed in this arranged photograph in Cairo, Egypt, on Monday, Feb.7, 2011. Deposits exceeded withdrawals today at Banque Misr SAE and Banque du Caire SAE, the state-run Middle East News Agency reported today, citing the Chairman of Banque Misr Mohamed Barakat.
Photographer: Shawn Baldwin/BloombergEgypt’s central bank, which unexpectedly left borrowing costs unchanged last week, is keeping its powder dry for what one economist called a “super” rate increase.
Five out of 8 economists in a Bloomberg survey had expected the Monetary Policy Committee to raise its key rate on Thursday to curb accelerating inflation and lay the ground for a widely anticipated devaluation. The meeting was likely the last before Egypt secures a $12 billion loan accord with the International Monetary Fund to finance a program that includes imposing value-added taxation and adopting a flexible exchange-rate.