CBE keeps Interest Rates Unchanged

The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided on Thursday to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 8.25%, 9.25%, and 8.75%, respectively.

In statements on Thursday, CBE said the discount rate was also kept unchanged at 8.75%.

MPC clarified in a statement that the annual headline urban inflation dipped to 5.4% in December 2020 from 5.7% in November 2020, attributing this decline to lower prices of fresh vegetables, reflecting their seasonal pattern as well as the partial reversal of the transitory shock in tomato prices.

“In the meantime, annual core inflation decelerated to 3.8% in December 2020 from 4% in November 2020,” it added.

Accordingly, annual headline urban inflation registered an average of 5.2% during 2020 Q4, coming below the lower target band of 6% previously announced in 2018.

The deviation from the target was a result of the impact of the COVID-19 pandemic outbreak and its resulting government containment measures on economic activity, according to the statement.