Egypt's CBE Keeps Interest Rates Unchanged

On Thursday, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to keep the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 18.25 percent, 19.25 percent, and 18.75 percent, respectively.

The discount rate was also kept unchanged at 18.75 percent.

On a global level, the MPC attributed its decision to the revising down of forecasts for key international commodity prices compared to those underlying the previous MPC meeting held in March.

It added that the global inflationary pressures have also cooled down as a result of the monetary policy tightening on the part of major central banks, the declining energy prices, and a reduction in global supply bottlenecks.

Likewise, forecasts for economic growth have broadly stabilized, while volatility in the financial conditions of key advanced economies has eased since March.

Domestically, CBE explained that the growth of real economic activity eased to 3.9 percent in the fourth quarter (4Q) of 2022, down from 4.4 percent in 3Q of 2022, which indicates that growth during the first half (1H) of the current FY2022/2023 posted 4.2 percent.

“Detailed sectoral data for 3Q of 2022 show that growth was primarily driven by private sector economic activity, specifically tourism, agriculture and trade. Additionally, most leading indicators point towards a slowdown of real GDP growth in the 1Q of 2023 Q1”, CBE explained.