Wednesday, October 5, 2022
HomeEconomyCentral Bank of Egypt keeps interest rates unchanged

Central Bank of Egypt keeps interest rates unchanged

CAIRO (Reuters) – The Central Bank of Egypt (CBE) surprised analysts by keeping overnight interest rates unchanged on Thursday, saying it believed inflation was under control in the medium term.

Bank also raised reserve ratio from 14 to 18% %, saying it would help tighten liquidity.

The Bank’s Monetary Policy Committee (MPC) maintains the deposit rate at 11. 25%, and its loan interest rate is .25%, it said in a statement.

A survey of 15 analysts predicts that the bank will Rate hike 100 basis points.

The Monetary Policy Committee said that while inflation was high, it was below March and April levels on a month-on-month basis, mainly driven by supply-side issues, especially international commodity prices.

“Therefore, MPC agrees that the current key CBE rate and the increased required reserve ratio are consistent with achieving price stability in the medium term,” it said in a statement accompanying the rate decision.

Egypt’s annual urban consumer inflation accelerated to 14.6% YoY from

August .6%, while core inflation rose from 200 to 13.7% .6%.

The Fed raised U.S. interest rates a day ago by 18 basis points. The bank’s new president, Hassan Abdalla, was appointed hours before the last MPC meeting in August.

The central bank kept interest rates unchanged at the last two meetings, in June 25 and August 100 , but raised it by 200 basis points in May, saying it was seeking to rein in inflation expectations after prices surged to their fastest pace in three years.

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