The Monetary Policy Committee (MPC) in Egypt has announced that it has decided to raise the key policy rates of the Central Bank of Egypt (CBE) by three percent to contain inflationary pressures and to steer annual inflation rates towards its upcoming targeted levels. Accordingly, the deposit interest rate has increased to 16.25 percent and the lending interest rate has increased to 17.25 percent.
The MPC stated that financial conditions have broadly stabilized, with several central banks indicating that their inflation may have peaked and may potentially have started its deceleration path. Nonetheless, the outlook for international commodity prices remains uncertain amid upside and downside pressures such as the expected global economic slowdown, the loosening of Covid-19 restrictions in China, and the continued uncertainty from the war between Russia and Ukraine on the overall outlook for global supply chains.
The committee noted that demand-side pressures have recently increased amid higher inflation. In accordance with the CBE’s resolve to achieve price stability over the medium term and in line with the disinflation target path, the MPC has set its upcoming inflation targets at seven percent on average by the fourth quarter of 2024 and five percent on average by the fourth quarter of 2026.