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’s central bank said Thursday that it raised key interest rates by 2% in a bid to combat the Arab country’s

The bank’s Monetary Policy Committee said in a statement that it had raised the new lending rate to 14.25% and the deposit rate to 13.25%. The discount rate was also raised to 13.75%, it said.

The intervention is primarily designed to offset rising inflation, which passed 15% in September, and lighten the financial pressure on lower- and middle-income households.

The Egyptian economy has been hard-hit by the coronavirus pandemic and the war in Ukraine, events that have disrupted global markets and hiked oil and food prices worldwide. Egypt is the world’s largest wheat importer, most of which came from Russia and Ukraine. The country’s supply is subject to price changes on the international market.

Why are more Egyptians taking to the Mediterranean?

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"The objective of raising policy rates is to anchor inflation expectations and contain demand-side pressures,’" the bank said.

The bank also said it would begin removing a system for importers, a red tape process introduced in February to control the demand on the currency for imports.

Following the bank's announcement, the Egyptian pound dropped in value against the U.S. dollar from around 19.75 pounds to a dollar to at least 22.25 pounds to a dollar, according to data provided by the National Bank of Egypt.

Late Wednesday, Egyptian Prime Minister Mustafa Madbouly also announced a 15% increase in the minimum monthly wage, from 2,700 pounds ($137) to 3,000 pounds ($152). Prime Minister Mustafa Madbouly’s announcement marks the fourth hike in the minimum wage since President Abdel Fattah el-Sissi took office in 2014.

The government is engaged in monthslong negotiations with the International Monetary Fund for a new loan to support a reform program and to help address the economic challenges caused by the war in Europe.

About a third of Egypt's 104 million people live in poverty, according to government figures.