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 200 basis points to reach the CBE’s upcoming inflation targets of seven percent on average by the fourth quarter of 2024 and five percent on average by the fourth quarter of 2026. Accordingly, the deposit interest rate has increased to 18.25 percent and the lending interest rate has increased to 19.25 percent.
Headline inflation in Egypt continued to increase to record 25.8 percent and 31.9 percent in January and February this year, respectively, while core inflation recorded 31.2 percent in January and 40.3 percent in February. The increase in inflation is due to supply chain disruptions domestically, the depreciation of the Egyptian pound, and demand-side pressures.