CBE raises interest rates by 300 bps: Egypt

PHOTO

The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided in its meeting on December 22nd to raise key interest rates by 300 basis points (bps), according to a press release.

Accordingly, the overnight deposit rate, overnight lending rate, and the rate of the main operation have been raised to 16.25%, 17.25%, and 16.75%, respectively. The discount rate has been also raised to 16.75%.

“The MPC judges that demand-side pressures have recently increased, as evidenced by developments in real economic activity relative to potential capacity, higher broad-based inflation outturns, and higher broad money growth,” the release mentioned.

The MPC cited the growth recorded in the third quarter (Q3) of 2022 as well as the surging inflation rates registered in November.

In November, Minister of Planning and Economic Development Hala El-Said revealed that the Egyptian economy had achieved a growth of 4.4% during Q1 of fiscal year 2022/2023.

Egypt’s annual core inflation rate rose to 21.5% in November 2022, compared to 19% in October 2022.

“The committee notes that the future path of inflation remains a function of the cumulative tightening in its stance to date and the lag with which monetary policy tools operate,” the release added.