CBE To Cut Interest Rates by 1.5%

The Central Bank of Egypt (CBE) decided to cut the overnight deposit and lending rates as well as the bank's main operation rate by 150 basis points to 14.25 percent, 15.25 percent, and 14.75 percent, respectively.

The central bank's Monetary Policy Committee (MPC) also decided to cut the credit and discount rates by 150 basis points to 14.75 percent.

After keeping the rate in its previous meetings at 15.75%, 16.75%, and 16.25%, respectively, CBE cuts interest rates for the second time this year.

The decision came in line with analysts' expectations of cutting interest rates on the back of the decline of annual inflation in Egypt to a four years low and a stable currency.

It also came amid a drop in interest rates worldwide, particularly in the US following a global economic downturn.

Against analysts' expectations, the annual inflation of consumer prices in Egypt fell to its lowest level since August 2015 to record 8.7 percent last July.

In the meantime, Gross Domestic Product (GDP) continued to increase slowly to record an estimated 5.7 percent in Q2 2019, the highest since 2011.

Moreover, unemployment resumed its decline to 7.5 percent, falling 6 percent from an all-time high in 2013.

The pace and magnitude of future adjustments in the central bank's benchmark interest rate will continue to rely on the consistency of inflation expectations with target rates, ensuring the continuation of the target downtrend.