CBE decision to fix interest rate contradicts expectations: expert

CBE decision to fix interest rate contradicts expectations: expert

The decision of the Monetary Policy Committee of the Central Bank came in contravention of the expectations of most international institutions to raise the interest rate, Banking expert, Ahmed Shawky, said.

Behind the stabilization were many important factors, he added.

Shawky added, in a special statement, that the Central Bank’s decision to fix the interest rate aims to maintain public debt levels and not put pressure on the public budget by increasing debt service burdens.

According to Shawky, one of the objectives of the interest rate stabilization decision is to maintain and support the growth rates of the Egyptian GDP, which exceeded six percent in the fiscal year 2021/2022 compared to 3.3 percent in the previous fiscal year, outperforming the expectations of the International Monetary Fund by 5.9 percent supported by the growth of the non-manufacturing sector, the petroleum sector, the tourism and trade sectors, the natural gas excavation sector and the Suez Canal revenues.

Shawky added, that the decision would contain inflation rates and keep the inflation rate at an average level of 13.5 percent during the last three months (13.5 percent in May – 13.2 percent in June – 13.6 percent in July), and therefore the increase is currently not required.

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