On Monday, a Reuters poll showed that the Central Bank of Egypt is expected to raise overnight interest rates by 200 basis points, or 2 per cent. The bank will likely raise the interest rate on deposits to 18.25% and on lending to 19.25% at the next meeting of its Monetary Policy Committee. On Sunday, financial analysts and investment banks expected the Central Bank of Egypt to raise interest rates between 2 and 3 per cent in light of the sharp rise in inflation, which reached 40.3 per cent last February, according to the Al-Borsa news website.

HSBC, Standard & Poor’s, Goldman Sachs, and Fitch Solutions have expected the Central Bank of Egypt to raise interest rates by 3%. “The Central Bank is currently most concerned with stopping pressure on the Egyptian pound and controlling inflation, and the main tool in its hand is raising interest rates,” according to Pascal Defoe, a chief economic analyst at BNP Paribas. Also, the head of the research sector at Arabiya Online, Mustafa Shafie, expected an interest rate increase of no less than 3% to restore market balance and curb inflation, ruling out the central bank’s resort to raising banks’ compulsory reserves. The course of inflation in Egypt is unstable, and inflationary pressures are upward and continuous, fueled by exchange rate movements and fuel price rises. Capital Economics also expected the Central Bank of Egypt to raise interest rates by 2.5%.