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Egypt Central Bank may raise rates on inflation, weak pound: Beltone Egypt's interest rate is likely to rise on Thursday evening due to high inflation and the dropping value of local pound
Cairo based investment bank Beltone Financial expects the state's central bank (CBE) to slightly raise key lending and deposit interest rates on its periodical monetary policy committe meeting on Thursday. The expected raise is due to the whooping increase of the headline inflation in February and local currency devaluation. Annual urban consumer inflation shot up to 8.7 percent (year-on-year) in February, up from 6.6 percent in January. Month-on-month urban consumer inflation also reached 2.8 percent last month, its highest levels since September 2010. In its last monetary policy committee's meeting, the CBE kept its rate at November 2011 levels, with overnight deposits at 9.25 percent and its overnight lending rate at 10.25 percent. Beltone forecasts the deposit rate to be raised to 9.75 percent and the lending rate to be raised to 10.5 percent. The investment bank added that turbulence seen by the Egyptian pound is another reason for the predicted rise in the interest rate. The Egyptian pound lost around 10 percent of its value since the start of the year. At last week's auction, the average yield on Egyptian 357 and 182-day t-bills slipped, with the former slipping to 13.776 percent from 13.968 percent and the latter to 13.127 percent from 13.260 percent, figures released by the central bank showed. http://english.ahram.org.eg/News/67396.aspx
