poll of 13 analysts
forecast the bank would raise rates by a median 150 basis
points.
The bank's Monetary Policy Committee (MPC) kept the lending
rate at 17.25% and the deposit rate at 16.25%.
The MPC said in its statement that it had front-loaded
rate hikes by 800 basis points (bps) over the last year, 500 bps
of which were in the fourth quarter, and believed these should
counter inflationary pressures.
In September, it increased the reserve ratio at banks by
four percentage points, a move also designed to dampen
inflation.
The MPC expected demand-side pressure on prices to continue after a December headline inflation figure of 21.3%, "as evidenced by developments in real economic activity relative to potential capacity and the impact of recent exchange rate fluctuations, both of which are consistent with higher broad money growth outturns."
Since March, the central bank has allowed the currency
to fall by nearly 50% against the dollar.
The MPC said it left rates unchanged to "assess the impact of the implemented front-loaded tightening policies in a data-driven manner," adding that future policy rates would remain a function of forecast rather than prevailing inflation.
Economic activity improved to 4.4% in the third quarter from 3.3% the previous quarter, driven primarily by tourism, agriculture and trade, the MPC said.
"Additionally, most leading indicators continued to
register positive growth rates in 2022 Q4, albeit at a slower
pace," it said.
"Going forward, real GDP growth is expected to moderate
in the fiscal year 2022/23 compared to the previous fiscal year,
before picking up thereafter," the statement said. The fiscal
year runs to end-June.
(Reporting by Alaa Swilam; editing by Jonathan Oatis and Leslie
Adler)
