Investors have been rattled by days of violent clashes in Cairo and other cities between security forces and protesters demanding an immediate end to military rule, days before the scheduled start of a parliamentary election.

Some analysts said a rate hike had become more likely in recent weeks because the central bank was searching for ways to support the currency after drawing down $14 billion of foreign currency reserves since a January popular uprising.

The Egyptian pound weakened to more than 6 to the US dollar on Thursday for the first time since January 2005 after Standard & Poor’s lowered its credit rating on Egypt, saying a “weak political and economic profile” had worsened.

“The central bank is obviously very worried and they cannot carry on using reserves forever. They have reached a dangerous level in terms of import coverage,” said Said Hirsch, Middle East economist at Capital Economics.

“If you look at foreign exchange reserves coupled with the escalation of political unrest, they had very little choice.” 

In the first change to benchmark rates since Sept. 17, 2009, the central bank raised its overnight deposit rate by 100 basis points to 9.25 percent and the overnight lending rate by 50 points to 10.25 percent.

The discount rate rose by 100 points to 9.5 percent.

Ten out of 11 economists in a Reuters survey had forecast that overnight rates would be unchanged at 9.75 percent for lending and 8.25 percent for deposits. One had predicted a hike of 50 basis points for both rates.