The CBE kept rates steady at its last meeting on May 23, saying that while economic growth had slowed, rising non-food inflation had offset a steady decline in food inflation.

The central bank raised rates by 600 basis points (bps) on March 6 as part of an $8 billion agreement with the International Monetary Fund, bringing total increases since the beginning of the year to 800 bps.

The median forecast in a poll of 18 analysts is for the central bank to hold its deposit rate steady at 27.25% and lending rate at 28.25% when the committee meets.

One analyst expected the bank to lower rates by 100 bps.

Since January 2022, the overnight deposit rate has been running below the rate of headline inflation, which in June slowed for a fourth straight month to 27.5%.

Inflation soared to a record 38% in September. "We expect that the CBE will leave rates on hold given that inflation is still well above the upper bound of the target range," said James Swanston of Capital Economics.

The Monetary Policy Committee is targeting inflation of below 9% by the end of 2024."Given the improved transparency in communications since March's policy shift, we will be on the lookout if there is any forward guidance as to when interest rate cuts will be considered given the climb down in inflation," Swanston added.

As part of its agreement with the International Monetary Fund in March, Egypt allowed its currency to plunge to under 50 to the Dollar after having fixed it at 30.85 for a year.

The Egyptian Pound has since strengthened to about 47.9 to the Dollar.

--Reuters--