Egypt's central bank increased rates by 600 basis points to a record high of 27.25%.

The overnight deposit rate, overnight lending rate, and main operation rate have been increased by 600 basis points to 27.25 percent, 28.25 percent, and 27.75 percent, respectively, by the Central Bank of Egypt (CBE).

According to TheNewsGuru.com (TNG), CBE increased Egypt’s discount rate by 600 basis points to 27.75 percent on Wednesday. However, the bank acknowledged that the stricter policies would cause a short-term slowdown in the real credit expansion of the private sector.

However, the top bank pointed out that there are further threats to its stability if strong inflationary pressures continue.

TNG remarks that as soon as the markets opened, Egypt’s pound plunged precipitously against the US dollar, from roughly 30.85 pounds to over 40 pounds.

CBE claims that the actions were implemented in response to inflationary pressures that were pushing the nation’s headline inflation to all-time highs.

In addition to managing the pound, which has been stable at 30.85 to the dollar for the past year as the central bank has attempted to protect its value in the face of a persistent lack of foreign exchange, the central bank has up until now had an inflation target.

Additionally, it said that the actions were taken in tandem with the government as a part of a larger package of substantial economic reforms, and they were supported unwaveringly by both bilateral and multilateral allies.