Egypt central bank raises rates by 50 bps as inflation climbs

CAIRO, March 21 Thu Mar 21, 2013 12:23pm EDT

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CAIRO, March 21 (Reuters) - Egypt's central bank raised its interest rates on Thursday by 50 basis points, taking the overnight deposit rate 9.75 percent and the overnight lending rate 10.75 percent, the bank said on its website after its monetary policy committee (MPC) met.

Before the meeting, economists had been split on whether the bank would hold rates to avoid damaging a very weak economy, or raise them in the hope of curbing a sharp rise in inflation and supporting the Egyptian pound.

The pound has lost 9 percent of its value against the dollar since late last year, pushing up the cost of imported goods. Inflation in towns and cities jumped to 8.2 percent in the year to February from 6.3 percent in January.

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