June 16, 2016 / 4:07 PM / in a year

Egypt c.bank raises key interest rates by 100 basis points

CAIRO (Reuters) - Egypt’s central bank raised its key interest rates by 100 basis points at its monetary policy meeting on Thursday, following a jump in inflation last month.

Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt March 8, 2016. REUTERS/Mohamed Abd El Ghany

The Monetary Policy Committee (MPC) raised the overnight deposit rate to 11.75 percent from 10.75 percent and the overnight lending rate was raised to 12.75 percent from 11.75 percent, according to a statement.

Urban consumer price inflation rose sharply to 12.3 percent in May. Core inflation, which excludes items with volatile prices, such as fruit and vegetables, rose to a yearly 12.23 percent last month, from 9.51 percent in April.

Egypt has struggled to revive growth and faced political and economic instability since a 2011 uprising ended the 30-year rule of Hosni Mubarak.

The country has faced an acute foreign currency shortage after the uprising drove away tourists and foreign investors. It devalued the pound to 8.78 per dollar in March and hiked interest rates by 150 basis points days later to control inflation, but prices have continued to rise.

President Abdel Fattah al-Sisi is under increasing pressure to revive the economy and keep prices under control.

Reporting by Ahmed Aboulenein; Editing by Lin Noueihed

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