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Egypt's central bank keeps key interest rates on hold

FILE PHOTO: Central Bank of Egypt's headquarter is seen in downtown Cairo, Egypt September 18, 2018. REUTERS/Mohamed Abd El Ghany

CAIRO (Reuters) - Egypt’s central bank kept its key interest rates on hold on Thursday, the bank said in a statement.

The bank’s monetary policy committee held the overnight lending rate at 9.25% and the overnight deposit rate at 8.25% for a third consecutive time, after cutting rates in September and November.

Of 16 analysts polled by Reuters, 15 believed the bank would leave rates unchanged at its regular monetary policy committee meeting. One predicted a cut of 50 basis points (bps).

The Central Bank of Egypt (CBE) noted that most of Egypt’s indicators were “gradually recovering” to their pre-pandemic levels, while prospects for global economic recovery appeared to be contingent on the coronavirus vaccine rollout.

“Meanwhile, international prices for oil, food and other commodities have surged to post-pandemic highs, with the level of uncertainty increasing regarding their future price trajectories,” the bank said.

The central bank has set a domestic inflation target of 7% (plus or minus 2 percentage points)on average until the fourth quarter of 2022.

Egypt’s statistics agency had said that the headline inflation rate in February was 4.5%, up from 4.3% in January.

Reporting by Nadine Awadalla; Editing by Aidan Lewis and Jonathan Oatis

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