(Bloomberg) -- Egypt left one of the world's top inflation-adjusted interest rates unchanged, even as the U.S. Federal Reserve began the countdown to an expected burst of monetary tightening.
The central bank held the benchmark deposit rate at 8.25% and the lending rate at 9.25%, the Monetary Policy Committee said Thursday in a statement. All 9 economists surveyed by Bloomberg predicted what's Egypt's 10th consecutive hold, even as expectations build for the first hike since 2017 later this year.
Fed Chairman Jerome Powell hasn't ruled out U.S. rate hikes at every meeting for the rest of 2022, leading what potentially could be the biggest and fastest tightening of global monetary policy in years to tame surging inflation. The Bank of England raised interest rates a quarter point earlier Thursday.
“Global financial conditions remain broadly accommodative but are expected to tighten over the medium-term as monetary policy is expected to normalize sooner than was projected,” Egypt's central bank said in its statement.
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The North African nation has become a favorite with overseas portfolio investors by offering the highest differential between key policy rates and inflation among more than 50 economies tracked by Bloomberg. Foreign investors pumped billion of dollars into the country's debt market, giving a buffer while the pandemic hit other sources of foreign currency, such as tourism.
Despite an uptick in local inflation expected in coming months, analysts expect the rate will remain within the central bank's target range of 5%-9%. Consumer prices climbed in December to 5.9% from 5.6% the month before.
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