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Egypt keeps rates unchanged, but large hikes lie ahead

The decision by Egypt’s central bank to keep its key interest unchanged at 11.75% today, despite the recent sharp rise in inflation, suggests that large rate hikes are only likely once an IMF deal is in place and the pound has been devalued. We think these are likely to take place in a relatively short period of time and expect 450bp of rate hikes by the end of next year.

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