Egypt’s central bank cuts interest rates by 3% to buffer economy from coronavirus

Egypt’s central bank cut its main interest rates by 3 percent on Monday as a “preemptive” move to support the economy in the face of the coronavirus outbreak.

In a statement, the central bank said it was slashing its main interest rates by 300 basis points. The overnight lending rate was cut to 10.25 percent from 13.25 percent and the overnight deposit rate to 9.25 percent from 12.25 percent, it added following.

The central bank’s monetary policy committee (MPC) had not been due to convene until April 2 to set interest rates. It had convened an unscheduled meeting by the to discuss the economic impact of the coronavirus pandemic.

Egypt held rates steady at its past two meetings after slashing them by 350 basis points between August and November in 2019.

“The MPC’s preemptive decision provides appropriate support to domestic economic activity given the current challenging external environment, while the inflation outlook remains consistent with achieving the inflation target of 9 percent (±3 percentage points) in the fourth quarter of 2020,” the statement read.

“The MPC will continue to closely monitor all economic developments and will not hesitate to adjust its stance to achieve its price stability mandate over the medium term.” the central bank said.

The total number of cases of the coronavirus outbreak has hit 150, Egypt’s minister of information Osama Heikal said in a press conference on Monday. The confirmed cases reported include 80 Egyptians, he added.