Egypt says historic foreign investment inflows seen since rate hike

Egyptian Central Bank Governor Tarek Amer sought on Sunday (May 28) to defend a surprise decision to hike interest rates last week, saying a historic level of foreign investment of nearly US$1 billion (S$1.4 billion) entered the country within days of the rate increase.

The central bank raised its key interest rates by 200 basis points on May 21 in an attempt to curb soaring inflation of over 30 per cent. It was the first rate hike since a 300 basis point increase in November.

The decision was heavily criticised by Egypt's financial community, which said it would do little to curb rampant inflation while potentially sapping new investment.