CAIRO, March 27 (Reuters) - Egypt's central bank (CBE) is forecast to hike its overnight interest rates by 200 basis points on Thursday as it struggles to bring soaring inflation under control, a Reuters poll showed on Monday.
The median forecast in a poll of 15 analysts is for the bank to increase its deposit rate to 18.25% and its lending rate to 19.25% at its regular monetary policy committee (MPC) meeting. Seven of the analysts expected an increase of 300 bps.
At its last meeting on Feb. 2, the central bank left rates steady despite analyst expectations of a 150 bps increase, saying steep rate hikes put in place over the previous year should help to tame inflation, which in December had accelerated to a five-year high of 21.3%.
After that meeting, the state statistics agency announced that annual inflation in January had surged to 25.8% and in February to 31.9%, its highest in five and a half years. February core inflation rose to an all-time high of 40.26%.
"The surprise pause undertaken by the CBE in February was widely considered a mistake," said Monica Malik of ADCB. "This raised further concerns around the credibility of central bank policy."
The central bank had raised rates by a total of 800 bps since Russia invaded Ukraine in early 2022.
The invasion triggered a crisis that bit into tourism, raised the bill for commodity imports and led foreign investors to pull more than $20 billion out of the local treasuries market. Since then, the currency has fallen by half against the dollar.
"With inflation surging and growing concerns over the commitment to orthodox policymaking, the CBE needs to deliver an aggressive rate hike to restore investors' faith," James Swanston of Capital Economics wrote in a note.
