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JPMorgan sees new 200 bps Egypt rate hike as inflation goes "to the moon"

Published 03/11/2024, 10:50 AM
Updated 03/11/2024, 11:59 AM
© Reuters. FILE PHOTO: A woman shops at a market in Cairo, Egypt, October 9, 2023. REUTERS/Mohamed Abd El Ghany

LONDON (Reuters) - JPMorgan forecast on Monday that Egypt's central bank could hike its key interest rate by another 200 basis points later this month amid signs that inflation was going "to the moon" following a bumper currency devaluation.

Egypt’s February consumer price inflation print saw the biggest sequential pace on record; jumping by 11.4% month-on-month from 1.6% in January, far outstripping economists' expectations.

© Reuters. FILE PHOTO: A woman shops at a market in Cairo, Egypt, October 9, 2023. REUTERS/Mohamed Abd El Ghany

"We now expect an additional 200 basis point hike to the deposit rate at the next meeting, which could yet be later this month as per the original (central bank) schedule," JPMorgan's analysts said in a research note.

They added that they no longer saw "any scope" for rate cuts until February 2025.

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