All eyes on Egypt's central bank meeting today amid expected interest rates hike

In its last meeting in February, the MPC maintained the key interest rates. The overnight deposit rate, overnight lending rate, the rate of the main operation, and the discount rate were kept unchanged at 16.25 percent, 17.25 percent, 16.75 percent, and 16.75 percent, respectively.

“Soaring inflation rates in the local market will encourage the CBE to hike the key interest rates on Thursday. Tightening the monetary policy is a key tool used to tame inflation, especially in times of crisis, and preserve the stability of the local market and prices,” banking expert Hani Abul-Fotouh told Ahram Online.

Hitting the highest levels since August 2017, Egypt’s annual headline inflation jumped to 31.9 percent in February, up from 10 percent in February 2022, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS) early in March.

The surge was driven mainly by the significant increase in food and beverage prices.

Core inflation climbed to 40.3 percent in February, up from 3.12 percent in February 2022.

Abul-Fotouh expects the CBE will hike interest rates by 2-3 percent (200-300 bps) in the face of elevating inflation.

A report published this week by the HSBC also expected the CBE will announce a three percent increase on Thursday in an attempt to put the brakes on borrowing and enhance economic growth rates.

Earlier in March, Goldman Sachs Group projected the CBE will raise interest rates by three percent.