The Monetary Policy Committee (MPC) at the Central Bank of Egypt (CBE) is set to meet today to decide on policy rates. We forecast a 100 basis points increase to current policy rates level of 9.25% for overnight deposit rate and 10.25% for overnight lending rate. Such a large rate hike is warranted, in our view, following the potential acceleration in inflationary pressures following the 13% devaluation of the USD-EGP earlier this week. In addition, the large hike is critical to enhance the attractiveness of domestic treasury bills’ yields to foreign investors. Attracting such flows are seemingly an important factor the CBE is targeting to boost its foreign reserves to USD25 billion by end 2016. (Mohamed Abu Basha)