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CAIRO, June 28 (Reuters) - Egypt’s central bank on Thursday kept its key interest rates unchanged as expected, expressing concern that inflation will rise after the government increased fuel and electricity prices this month.
The bank said the Monetary Policy Committee (MPC) had decided to keep its deposit and lending rates at 16.75 and 17.75 percent respectively.
“Fiscal consolidation measures are expected to lead to one-off increases in the price level, which translate into temporary higher inflation rates,” the bank said in a statement.
Egypt this month announced a raft of new austerity measures, raising fuel prices by up to 50 percent, electricity prices by an average of 26 percent and nearly doubling the price of piped drinking water.
The steps were the latest reforms required under a $12 billion International Monetary Fund (IMF) loan, which also involved a currency float in 2016 that caused headline inflation to soar to up to 33 percent. (Reporting by Sami Aboudi; Editing by Andrew Roche)