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Central Bank of Egypt leaves rates unchanged
The Central Bank of Egypt has said that it was leaving unchanged at 8 and 10 per cent the lending and borrowing rates which set a corridor for the interbank market. In a statement after a meeting of the monetary policy committee, it said that a recent rise in inflation was mainly due to shortages driven by an outbreak of bird flu, which hit Egypt hard in February and pushed up protein prices.
Consumer inflation has risen from 3.7 per cent in the year to March to 6.4 per cent in the year to June. Economists say food has been the biggest factor in the increase and the outbreak of bird flu made a significant contribution.
The 8 to 10 percent corridor has been in force since April, when the central bank cut both rates by 25 basis points. The bank controls the range by offering to take overnight deposits at 8 per cent and to lend overnight at 10 per cent. Rates on 91-day bills, for example, have climbed from about 8 per cent in February to 8.8 per cent this
month.
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