Egypt central bank keeps interest rates unchanged
Central bank of Egypt has announced on Thursday it will keep interest rates steady, with the deposit rate at 16.75% and the lending rate at 17.75%
Egypt's Central bank has announced on Thursday it will keep interest rates unchanged, with the deposit rate at 16.75% and the lending rate at 17.75%
Analysts say the decision to keep rates high was widely expected.
The bank’s Monetary Policy Committee said:
‘Current policy rates and the inflation outlook remain in line with achieving the targeted disinflation path.’ They said in a statement.
Headline and core inflation slowed in November, with headline inflation dropping to 15.7% from October’s 17.7%. Core inflation slowed to 7.94% in November, marking its lowest since April 2016.
‘The MPC closely monitors all economic developments and will not hesitate to adjust its stance to achieve its mandate of price stability over the medium term,’ The bank’s statement said.
Egypt’s Gross Domestic Product grew by 5.3% in June 2018, the highest rate in 10 years.
As part of the latest reforms under a $12 billion International Monetary Fund loan programme signed in 2016, Egypt raised electricity, fuel and transport prices.
The programme included a currency float, deep cuts to energy subsidies and tax hikes.
The central bank's monetary policy committee raised interest rates by 700 basis points over 8 months following the IMF deal, then cut rates in February and March 2018.
Egypt has previously come under pressure to keep interest rates high during the emerging market sell-off, while foreign ownership of Egyptian treasury bills fell in October to $11.7 billion.
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