(Adds inflows since float)
CAIRO May 28 Egyptian Central Bank Governor
Tarek Amer sought on Sunday to defend a surprise decision to
hike interest rates last week, saying a historic level of
foreign investment of nearly $1 billion entered the country
within days of the rate increase.
The central bank raised its key interest rates by 200 basis
points on May 21 in an attempt to curb soaring inflation of over
30 percent. It was the first rate hike since a 300 basis point
increase in November.
The decision was heavily criticised by Egypt's financial
community, which said it would do little to curb rampant
inflation while potentially sapping new investment.
The level of investment inflows that followed the hike "has
not happened in the history of Egypt" and "reflected the success
and soundness of the monetary policy," Amer was quoted by state
news agency MENA as saying.
The central bank abandoned its currency peg of 8.8 Egyptian
pounds to the U.S. dollar on Nov. 3, causing the pound to
roughly halve in value in a bid to unlock foreign currency
inflows and dry up a black market for dollars.
Amer said on Sunday that foreign currency inflows into the
banking system since the float have reached about $25 billion.
(Reporting by Mostafa Hashem; Writing by Eric Knecht; Editing
by Ahmed Aboulenein and Stephen Powell)