A statement from the bank explained Egyptian Central Bank The committee maintained the overnight deposit and lending rates and the central bank’s main operation rate at 27.250 percent, 28.25 percent, and 27.75 percent, respectively.
It also decided to keep the credit and discount rates at 27.75 percent.
This decision reflects the latest developments and expectations at the global and local levels since the previous meeting of the Monetary Policy Committee.
The committee said in a statement, “The real GDP witnessed a growth of 2.4 percent in the second quarter of 2024 compared to about 2.2 percent in the first quarter of 2024, which indicates a slowdown in growth during the fiscal year 2023-2024 to 2.4 compared to about 3.8 percent during the year.” Finance 2022-2023.
She added: “Expectations indicate that inflation will stabilize at its current levels until the fourth quarter of 2024, although it is surrounded by some upside risks, including the continuation of regional tension, the rise in global prices of basic commodities, and the possibility that public financial control measures will have an impact that exceeds expectations.”
She continued, “The inflation rate is expected to decline starting from the first quarter of 2025, with the cumulative effect of monetary tightening decisions and the positive impact of the base period being achieved.”
Assem Mansour, head of market research at OW Markets, said that maintaining current interest rates comes in the context of the central bank’s efforts to achieve economic stability in the face of continuing inflationary pressures, especially with the rising costs of basic materials and global supply challenges.
He added that fixing the interest rate “achieves a balance between supporting economic stability and confronting inflation, and may contribute to attracting more investments.”
He told Reuters: “Expectations of foreign investment flows have strengthened after the signing Egypt deal International Monetary Fund In March and the expectations of economic institutions such as “Goldman Sachs“Egypt will achieve a surplus in external financing amounting to $26.5 billion in the coming years, which will ease the pressure on the Central Bank and allow it to be patient in adjusting interest rates.”
The Central Bank has not changed interest rates since it raised them by 600 basis points in an extraordinary meeting in March as part of a loan agreement with the International Monetary Fund, the size of which was increased to eight billion dollars. This increase came after an increase of 200 basis points on the first of February.
Egypt’s inflation rate was trending down from its highest level of 38 percent in September 2023, but it rose unexpectedly in August and September 2024.
Inflation recorded 26.2 percent in August, up from 25.7 percent in July, before continuing to accelerate to 26.4 percent in September.
