The Central Bank of Egypt on Thursday raised key interest rates by 200 basis points, following a meeting of the Monetary Policy Committee.
The bank set the overnight lending rate at 19.25% and the overnight deposit rate at 18.25%.
The monetary policy committee of the bank decided to raise the price of the main operation of the central bank by 200 basis points, to reach 18.75%, and it was also decided to raise the credit and discount rate by 2%, to reach 18.75%.
The interest rate hike was in line with the expectations of many analysts. The majority of expectations favored an increase in interest rates by rates ranging between 100 and 300 basis points, in light of the stability of inflation at the highest level in more than 5 years.
The Monetary Policy Committee said in its statement that the path of the basic interest rates depends on the expected inflation rates and not on the prevailing inflation rates.
The committee stressed the need to restrict monetary policy as a prerequisite for achieving the inflation rates targeted by the Central Bank of Egypt, which amount to 7% (± 2 percentage points) on average during the fourth quarter of 2024 and 5% (± 2 percentage points) on average during the fourth quarter of 2024. 2026.
The Monetary Policy Committee indicated that it will closely follow all economic developments and will not hesitate to amend its policy in order to achieve the goal of price stability.
And the Monetary Policy Committee of the Central Bank of Egypt had decided, in its meeting on the first of February 2023, to keep the interest rate on deposits and overnight lending unchanged at 16.25% and 17.25%, respectively, after it raised interest rates by 800 basis points during 2022. And by 500 basis points in the fourth quarter alone.
