Cairo - Mubasher: The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) has decided, in its meeting on Sunday, to raise interest rates by 200 basis points, according to an official statement.

This increases the overnight deposit rate, overnight lending rate, and the rate main operation to 16.75%, 17.75%, and 17.25%, respectively.

The discount rate was also raised by 200 basis points to 17.25%.

This comes as the CBE aims at countering the rising annual inflation rates which increased to 32.9% in April, compared to 32.5% and 31.7% in March and February respectively.

“While the previous tightening of policy rates and the consistent reduction of short-term excess liquidity have so far successfully managed to contain underlying inflation excluding supply-shocks, as evident in the inflation developments, the balance of risks surrounding the inflation outlook has tilted more strongly to the upside with recent economic and monetary data releases pointing to strengthening demand-side pressures.”

“Furthermore, the MPC envisages risks related to inflation expectations resulting from elevated annual inflation levels despite the continued moderation of monthly rates. Consequently, the MPC decided that tightening monetary conditions are warranted in commitment to its price-stability mandate,” the report explained.

On 30 March 2017, the MPC decided to maintain interest levels, keeping it unchanged.

Last year, on 3 November, the CBE decided to float the Egyptian pound and raised interest rates by 3% or 300 basis points.