Egypt’s CBE leaves key interest rates unchanged for third time in 2021

The Monetary Policy Committee (MPC) of Egypt’s central bank (CBE) decided on Wednesday to keep the current interest rates unchanged for the third time in a row in 2021.

According to the decision, the overnight deposit rate, overnight lending rate, and the rate of the main operation were maintained at 8.25 percent, 9.25 percent, and 8.75 percent, respectively.

The discount rate was also kept unchanged at 8.75 percent.

The MPC said that its decision is consistent with achieving the inflation target of 7 percent (±2 percentage points) on average in the fourth quarter of 2022 and price stability over the medium term.

The decision came in light of the stabilisation of Egypt’s annual headline urban inflation at 4.5 percent in March and February 2021, after registering 4.3 percent in January 2021, according to the CBE.

The stabilisation in the annual headline inflation rate came due to the combined effect of the higher annual contribution of food items and the lower annual contribution of non-food items, the CBE expounded.

It added that annual food inflation increased in March 2021 after remaining stable in February 2021, reflecting higher annual contribution of volatile food items, as well as core food items, but by a lesser extent, in line with their seasonal patterns.