CAIRO, June 17 (Reuters) - Egypt's central bank kept its key
interest rates unchanged during its monetary policy committee
(MPC) meeting on Thursday, the bank said in a statement.
The committee kept the overnight lending rate at 9.25% and
the overnight deposit rate at 8.25% for a fifth consecutive
time, after cutting rates in September and November.
Egypt has some of the highest real interest rates in the
world, which has helped to attract investment in treasuries but
discouraged corporate borrowing.
Eighteen analysts polled by Reuters forecast that the bank
would keep rates unchanged as increased commodity prices and
domestic inflation counteract any pressure for a reduction.
The MPC noted that headline inflation had increased to 4.8%
in May from 4.1% in April, after having a dipped from 4.5% in
March. Inflation readings are expected to be affected by
unfavorable base effects in the near term, it added.
The MPC said global economic activity was expected to
continue recovering from the COVID-19 pandemic. Egypt's real GDP
growth stood at 2.9% during the first quarter of 2021,
preliminary figures show, up from 2.0% during the previous
quarter, it noted.
"Real GDP growth is expected to remain on an accelerating
trajectory, which is partially base effect driven from last
year's shrunken base," the bank said.
The central bank twice lowered its benchmark rate by 50 bps
in September and November last year, and cut it by 300 bps at
the outbreak of the pandemic in March 2020. Rates are at their
lowest since July 2014.
The MPC in December narrowed its inflation target to 5%-9%
from the previous 6%-12%.
(Reporting by Mahmoud Mourad; editing by Barbara Lewis)