Egypt’s central bank left its key overnight interest rates unchanged on Thursday despite this week’s surprise rise in core inflation, a decision in line with forecasts of all 11 economists polled by Reuters.
The central bank maintained its lending rate at 9.75 percent and its borrowing rate at 8.25 percent, the bank said on its website. It also held its discount rate at 8.5 percent.
Economists predicted the bank would not boost rates despite the unexpected upsurge in core inflation, saying the authorities preferred to concentrate on growth before a parliamentary election, due in November.
Core inflation, released on Monday, jumped to 8.2 percent in the year to August from 7.1 percent in the year to July, while urban consumer inflation inched up to 10.9 percent from 10.7 percent.
The consensus among analysts for August core inflation had been 7.1 percent.
Core inflation has now moved above what analysts say is the central bank’s comfort zone of between 6 and 8 percent. The bank does not say what its preferred range is.
Egypt’s economy grew 5.9 percent year-on-year in the second quarter, up from 4.7 percent a year earlier.
