BREAKING: Egypt’s central bank keeps key interest rates unchanged

Egypt’s central bank has on Thursday kept its key interest rates unchanged in its penultimate monetary policy meeting for 2023.

The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided to hold the overnight deposit rate, overnight lending rate, and the rate of the main operation unchanged at 19.25 percent, 20.25 percent, and 19.75 percent, respectively, CBE explained in a statement.

The discount rate also remained unchanged at 19.75 percent.

The MPC cited the rising geopolitical tensions in the region that led forecasts for key international commodity prices, particularly energy to be revised upwards compared to the forecasts underlying the previous meeting.

In September, Egypt’s monthly inflation accelerated by 2 percent to exceed 38 percent. The annual headline inflation reached in September 38 percent, down from 39.7 percent in August, according to a report by the country’s official statistics agency CAPMAS in October.

The pause on interest rate change comes after a string of total 11 rate hikes, (1,100 bps) introduced since March 2022.

“… the MPC decided to keep policy rates unchanged and to continue assessing the cumulative impact of previously enacted tightening policies and its transmission to the economy in a data-driven manner. The MPC reiterates that the path of future policy rates remains a function of forecasted inflation rather than prevailing inflation rates and will continue to judge the balance of risks surrounding the inflation outlook.” the statement read.

“The committee will not hesitate to utilise all its available tools to ensure that the policy stance is set at sufficiently restrictive levels with the aim of attaining the CBE’s upcoming inflation targets of 7 percent (±2 percentage points) on average by 2024 Q4 and 5 percent (± 2 percentage points) on average by 2026 Q4.”