CBE raises interest rates by 100 basis points

CBE raises interest rates by 100 basis points

The Monetary Policy Committee of the Central Bank of Egypt during its Thursday meeting raised overnight interest rates by 100 basis points, to avoid inflationary pressures and control inflation expectations, according to the committee’s statement.

The lending rate was increased to 20.25 percent, the deposit rate to 19.25 percent and the main operation rate rose to 19.75 percent.

The credit and discount rates were also raised by 100 basis points to 19.75 percent.

Global commodity price expectations continued to decline compared to previous expectations at the Monetary Policy Committee’s meeting in June.

Oil prices increased during July while expected inflation rates in some major economies declined, though staying at levels that exceeded the target rates.

The committee believes that inflation rates are expected to peak in the second half of 2023, before returning to the previously announced target inflation rates, supported by the restrictive monetary policies so far, it added.

The course of basic interest rates depends on expected inflation rates and not prevailing inflation rates, it said, adding it will not hesitate to use all available monetary policy tools to maintain restrictive monetary conditions, aiming to achieve target inflation rates of seven percent (± 2 percentage points) on average during the fourth quarter of 2024