Egypt's central bank increases key interest rates by 3%, maintains inflation target at 7% through 4Q of 2024

The MPC raised the overnight deposit rate, overnight lending rate, and the rate of the main operation to 16.25 percent, 17.25 percent, and 16.75 percent, respectively.

The discount rate was also raised by 300 basis points to 16.75 percent.

This is the highest increase since 3 November 2016 when the CBE raised its discount rate by 3 percent to reach 15.25 percent up from 12.25 percent.

This is the fourth time that the MPC has decided to raise key interest rates since the start of the Russia-Ukraine war in February, totaling 8 percent, in an attempt to curb inflation triggered by the war.

The annual core inflation rate recorded 21.5 percent in November, up from 19 percent in October, according to the CBE.

The MPC had raised key interest rates by a total of 500 bps, in three separate moves, since the start of the war in Ukraine.

Analysts had expected that the MPC would raise the interest rates by a maximum of 2 percent (200 bps) to rein in inflation.