Egypt raises interest rates to curb surging inflation

Egypt's Central Bank said it has raised interest rates as the embattled Middle Eastern country continues to battle surging inflation and a depreciating currency.

In an online statement, the bank's monetary policy committee said the most basic lending rate, the overnight deposit rate, has increased from 16.25% to 18.25%.

The hike aims to ease spiraling inflation, with the annual figure reaching 32.9% in February, up from 26.5% in January.

Nearly a third of Egyptians live in poverty, according to official figures, and are struggling to keep up with rising prices, which have soared since Russia invaded Ukraine last year. The prices of basic items such as grains, meat, poultry, fish and fruit, have risen drastically over recent months.

Since the outbreak of the war in Europe, the Egyptian pound has lost more than 50% of its value against the dollar.

The currency slide accelerated after Egypt first announced it had reached a $3 billion bailout agreement with the International Monetary Fund last October. In exchange, Egypt's Central Bank agreed to implement several economic reforms, including a shift to a flexible exchange rate.

To alleviate the hardship, Egypt's government has set up markets selling basic goods for cheaper prices and increased public servants' pay.

Earlier this month, Egyptian President Abdel Fattah el-Sissi announced that government employees would receive pay increases of 1,000 Egyptian pounds a month, about $ 34.

Egypt last raised its interest rates in December.