CAIRO - Egypt's central bank kept its overnight interest rates unchanged on Thursday, saying that although the economy was growing below potential it would leave its monetary policy unchanged until inflation fell.

The lending rate remained at 28.25%, while the deposit rate stood at 27.25%, the bank's monetary policy committee (MPC) said in a statement.

"The committee views the current monetary policy stance as appropriate until a significant and sustained decline in inflation materialises," the statement said.

Gross domestic product grew by 2.4% in the second quarter of 2024, up from 2.2% in the first quarter. Growth for the full fiscal year to end-June slowed to 2.4% from 3.6% in 2022/23.

"Projections for Q4 2024 show that while economic activity continues to pick up, estimates indicate that real GDP remains below potential, thereby supporting the expected disinflation path over the short term," the MPC statement said.

Gross domestic product was forecast to recover during the current financial year, it added.

The MPC said it expected inflation to remain high until the the end of calendar 2024 then ease appreciably in the first quarter of 2025.

Inflation edged up for a third straight month to 26.5% in October, which was nonetheless much lower than its peak of 38.0% in September 2023.

(Reporting by Enas Alashray and Yomna Ehab; Writing by Patrick Werr; Editing by Alexander Smith and Alex Richardson)