Egypt’s central bank keeps interest rates unchanged for the third time in a row

Egypt’s central bank (CBE) has on Thursday kept its key interest rates unchanged for the third time in a row.

The central bank’s Monetary Policy Committee (MPC) has maintained its overnight lending rate at 11.25 percent, its overnight deposit rate at 12.25 percent, and discount rate at 11.75 percent.

MPC kept its rates on hold at its last two meetings, on June 23 and August 18, but raised them by 200 bps in May, saying it was seeking to curb inflation expectations after prices soared by their fastest in three years.

The CBE also decided to increase the required reserve ratio to 18 percent from 14 percent.

“This works as a catalyst, complementing the tightening stance that the CBE is maintaining, by calibrating liquidity conditions.” MPC said in a statement.

The MPC said it concurs that “the current key CBE rates coupled with the increased required reserve ratio are consistent with achieving price stability over the medium term.”

“Noting that the previous tightening policy rates by 300bps is still transmitting through the economy, the MPC will continue to assess the impact on inflation expectations and other macroeconomic developments over the medium term.”

“The elevated annual headline inflation rate will continue to be temporarily tolerated above the CBE’s pre-announced target of 7 percent (±2 percentage points) on average in 2022 Q4. The CBE remains committed to achieving low and stable levels of inflation over the medium term which is a requisite condition towards sustainable economic growth.”