CAIRO, Jan 13 (Reuters) - Egypt's central bank is expected to leave interest rates unchanged on Thursday after inflation rose last month, making it less likely the bank would raise rates to boost the economy.
Four economists surveyed by Reuters forecast that the central bank would keep overnight rates at 10.25 percent for lending and 9.25 percent for deposits when it meets on Thursday. A fifth expected the bank to cut by 25 basis points.
"December's consumer price figures showed that inflation edged back above 10 percent year-on-year ... " Capital Economics said in a note. "While we don't think this will trigger a rate hike, equally it rules out any chance of a rate cut at this meeting."
To help reduce its swelling deficit, the government slashed energy subsidies in July, raising energy costs by up to 78 percent. That raised inflation, prompting the central bank to raise its benchmark rates by 100 basis points on July 17. It has kept rates on hold since.
Inflation fell in November, and plummeting global oil prices - a boon for oil importers like Egypt - had raised expectations of a looming rate cut. But annual urban consumer inflation rose to 10.1 percent in December as food and housing costs increased.
Economists said that made it likely the central bank would hold off, particularly amid pressure on the Egyptian pound. The dollar fetches over 60 piastres more on the black market than the official rate of 7.14.
The central bank introduced a fourth weekly dollar auction last month in an effort to close the gap, but analysts say it is reluctant to devalue lest it trigger inflation.
However, Hany Genena, head of research at Pharos Securities Brokerage, said the time was ripe for a rate cut and devaluation of the currency.
"All dynamics are in favour of an immediate rate cut," he said. "There is no reason to delay what could turn out to be a strong confidence booster."
(Reporting by Lin Noueihed; Editing by Larry King)