CBE to review interest rates for last time in 2020 Thursday

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) is anticipated to convene Thursday for the last time in 2020, to review key interest rates.

During the last meeting, held 12 November, the CBE decided to cut the overnight deposit rate, overnight lending rate, and the rate of the main operation by 0.5 per cent (50 bps), to reach 8.25 per cent, 9.25 per cent, and 8.75 per cent respectively.

The discount rate was also cut by 0.5 per cent to 8.75 per cent.

The cuts brought the total cuts introduced in 2020 to four percent in response to the Covid-19 pandemic and its associated challenges on the global economy, and on the Egyptian economy in particular.

In March, the CBE decided to cut key interest rates by three percent (300 basis points) as a preemptive measure to contain the effects of the Covid-19 crisis on Egypt’s economy and to maintain the gains of the government’s economic reform programme, according to the CBE.

Over four meetings since March, the CBE has not introduced more interest rate cuts thanks to a declining headline inflation rate, which was under the limit the CBE set at nine percent (+/-3 percent) until the 12 November meeting.

Egypt’s recent monthly inflation rate increased by 1.1 percent in November to reach 2.9 percent, up from 1.8 percent in October, the Central Agency for Public Mobilisation and Statistics (CAPMAS) announced in December.