CBE Cuts Interest Rate by Another 1%

The Central Bank of Egypt (CBE) decided to reduce the overnight deposit and lending rate including the main operation rate by 100 basis points to 13.25 percent, 14.25 percent, and 13.75 percent, respectively.

The central bank's Monetary Policy Committee (MPC) also decided to cut the credit and discount rate by 100 basis points to 13.75 percent.

The central bank cut interest rates for the third time this year after recent cuts in February and August.

The CBE's decision came in line with analysts' expectations of cutting interest rates on the back of the decline of Egypt's annual inflation to its lowest level since 10.9 percent of 2013.

Also, the global trend to cut interest rates, most notably in the United States amid the global economic downturn has pushed the MPC to cut rates.

According to the latest data from the Central Agency for Public Mobilization and Statistics (CAPMAS), Egypt's annual inflation rate continued to decline, reaching 6.7 percent last August, compared to 13.6 percent in the same month last year and 33.2 percent in 2017.

The CBE said in a statement that the consumer price index (CPI) recorded a monthly rate of -0.4% last August, compared to 0.1% in July.

The Bank aims to reduce inflation to single-digit, aiming to reach 9% (± 3%) on average by the end of 2020.