The Central Bank of Egypt (CBE) surprisingly left interest rates unchanged at Thursday’s MPC meeting but, with inflation likely to rise even further above the central bank’s target, we still think that policy will be tightened further. We have pencilled in a further 250bp of hikes, to 18.75%, by mid-2023. Even if rates are kept on hold, the CBE signalled that monetary conditions will be kept tight to get inflation down.
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