Current interest rates depend on expected inflation rates, not prevailing ones: Egypt

Current interest rates depend on expected inflation rates, not prevailing ones: Egypt

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided, in its meeting Thursday, to maintain its basic interest rates at 11.25% for deposit, 12.25% for lending, and 11.75% for the credit and discount rate and the price of the main operation of CBE.

In its resolution accompanying this decision, the Committee said: “At the global level, global economic activity has seen a slowdown as a result of the continuing Russian-Ukrainian crisis.” The trade sanctions imposed on Russia and the resulting bottlenecks in the supply and supply chains have led to an increase in world prices of basic commodities, as well as prices, as central banks abroad continued to tighten monetary policies by raising interest rates and reducing asset purchase programs, to contain high inflation rates in their countries. Moreover, the recently imposed closure in China has raised concerns about the potential to exacerbate disruptions to global supply chains.

“Initial data indicate that domestic economic activity continued to recover during the first quarter of 2022, albeit at a slower pace, as real GDP recorded a growth rate of 5.4% compared to 8.3% during the fourth quarter of 2021. This slowdown is due to several factors, most notably the repercussions