CBE reviews interest rate amid expectations to remain unchanged

CBE reviews interest rate amid expectations to remain unchanged

CBE reviews interest rate amid expectations to remain unchanged

The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) hold its fifth periodic meeting of 2020, on Thursday, to review its interest rates.

The CBE interest rate is the most important indicator of the direction local market interest rates will take.

At the MPC's extraordinary meeting on 16 March, the CBE interest rate was cut by 3%, as part of its plan to counteract the repercussions brought on by the novel coronavirus (COVID-19) pandemic.

In two subsequent meetings, the committee decided on fixing rates at 9.25% for overnight deposits, 10.25% for lending, and 9.75% for credit, discount, and the main operation.

In its statement after these two meetings, the committee stressed that current interest rates are appropriate for the present time.

It added that the rates are also consistent with achieving the target inflation rate of 9% (±3%) in the fourth quarter (Q4) of 2020, and price stability in the medium term.

Banking expert Mohamed Abdel-Aal

On 10 June, the CBE announced that the annual rate of core inflation fell to 1.5% in May 2020, compared to 2.5% in April. It added that the monthly average rate of core inflation fell 0.3% in May, compared