CAIRO (Reuters) -The Central Bank of Egypt (CBE) on Thursday raised its overnight interest rates by 200 basis points, seeking to contain inflation expectations after prices soared by their quickest in three years.

The bank’s Monetary Policy Committee (MPC) increased the deposit rate to 11.25% from 9.25% and the lending rate to 12.25% from 10.25%, it said in a statement accompanying the decision.

It cited an increase in annual urban inflation to 13.1 percent in April from 10.5 percent in March, its highest since May 2019.

Prices were pushed up in part by a currency depreciation and higher wheat prices after the Ukraine crisis, the statement added.

“The MPC decided that raising policy rates is necessary to contain inflationary pressures which is consistent with achieving price stability over the medium term,” it said.

“The elevated annual headline inflation rate will be temporarily tolerated relative to the CBE’s pre-announced target” of between 5% and 9% before declining after the fourth quarter, it said.

Eighteen analysts polled by Reuters had expected the bank to raise the median deposit rate to 11.00% and its lending rate to 12.25%.

At a surprise meeting on March 21, the bank raised rates by 100 bps, citing global inflationary pressures, after having kept them unchanged for nearly 18 months.

“Reining in inflation seems like the primary objective now, very much aligned with central banks elsewhere,” said Allen Sandeep of Naeem Research. “Elevated inflation seems like it’s here to stay for the near term.”

Thursday’s statement said global financial conditions had also tightened as major central banks tightened policy rates.

“Achieving low and stable inflation over the medium term is a prerequisite condition to achieve high and sustainable growth rates,” the MPC said.

The MPC also increased its discount and credit rates by 200 basis points to 11.75%.

(Reporting by Mahmoud Mourad, Yasmin Hussein and Lilian Wagdy; Writing by Mahmoud Mourad and Patrick Werr; Editing by Angus MacSwan)