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Egypt Keep Interest Rates Unchanged
The central bank of Egypt left its key overnight deposit rate unchanged at 8.25% on February 4th 2021, as expected. The overnight lending rate was also left at 9.25%, and the discount rate at 8.75%. Policymakers said the decision was consistent with achieving the inflation target of 7% (±2 percentage points) on average in 2022 Q4 and price stability over the medium term. The annual headline inflation eased to 5.4% in December 2020 from 5.7% in November, mainly driven by lower prices of fresh vegetables, reflecting their seasonal pattern. The Committee also disclosed that the economy likely expanded 0.7% in Q3 of 2020, recovering from a 1.7% contraction in the previous period. Meantime, short-term indicators continued to display signs of recovery in Q4 2020. The central bank stressed that the path to global economic recovery remains a function of the efficacy, availability and the rollout speed of vaccines, which could ease the level of uncertainty posed by the pandemic.
Published on 2021-02-04

Egypt Keeps Rates Steady, Sets New Inflation Target
The central bank of Egypt left its key overnight deposit rate unchanged at 8.25 percent on December 24th 2020, in line with expectations. The overnight lending rate was also left at 9.25 percent, and the discount rate at 8.75 percent. Policymakers lowered its inflation target for 2022 to 7 percent (±2 percentage points) from 9 percent (±3 percentage points). Egypt’s GDP growth is expected to recover albeit gradually, with structural measures expected to support economic activity.
Published on 2020-12-24

Egypt Unexpectedly Cuts Key Interest Rate to 8.25%
The Central Bank of Egypt unexpectedly cut its key overnight deposit rate by 50 bps to 8.25 percent during its November meeting, surprising markets that expected no changes. The move follows a similar margin cut on September 24th and brings borrowing costs to its lowest level since 2014. Policymakers noted that the annual inflation rate rose to 4.5% in October mainly driven by the cost of food. The Committee said that the outlook for inflation in the last quarter of 2020 is estimated to be in the low single digits range, with an increased likelihood of coming under the target floor of 6%. Policymakers added that the decision to cut rates provides appropriate support to economic activity while remaining consistent with price stability over the medium term. The Committee said it will closely monitor all economic developments and will not hesitate to utilize all available tools to support the recovery of economic activity, within its price stability mandate.
Published on 2020-11-12

Egypt Cuts Key Interest Rate to 8.75%
The Central Bank of Egypt lowered its key overnight deposit rate by 50 bps to 8.75 percent during its September meeting, bringing borrowing costs to its lowest since November of 2015. In August, headline inflation eased to a ten-month low of 3.4 percent from 4.2 percent in July, well below the bank's target range of 6 percent. Meantime, the unemployment rate was 9.6 percent in Q2 2020 up from 7.7 percent in the previous period, highlighting the impact of the coronavirus outbreak on the labour market. The overnight lending rate and the discount rate were also cut by 50 bps to 9.75 percent and 9.25 percent, respectively.
Published on 2020-09-24

Egypt Keep Interest Rates Unchanged
The Central Bank of Egypt left its overnight deposit rate steady at 9.25% during its regular meeting in August of 2020, as widely expected. Policymakers kept interest rates steady despite inflation plunging to an eight-month low in July and an economic slowdown caused by the coronavirus pandemic.
Published on 2020-08-13

Egypt Keep Interest Rates Unchanged
The Central Bank of Egypt left its overnight deposit rate steady at 9.25% during its regular meeting in June of 2020, as widely expected. Policymakers said that the decision is consistent with achieving the inflation target rate of 9% (+/- 3%) in the last quarter of 2020 and price stability over the medium term. The annual inflation hit a six-month low of 4.7% in May, amid lower food prices supported by favorable base effects stemming mainly from Ramadan and Eid-Al-Fitr being in May in 2019 compared to April and May in 2020. The Committee also noted that economic growth slowed to a preliminary 5% in Q1 of 2020 from 5.6% in the previous period, as activity in March was partly affected by the Covid-19 and the resulting containment measures. Still, the recently announced gradual easing of lockdown measures is expected to support the recovery of economic activity. The overnight lending rate and the discount rate were also kept steady at 10.25% and 9.75%, respectively.
Published on 2020-06-25

Egypt Holds Key Interest Rate Steady at 9.25%
The Central Bank of Egypt left its overnight deposit rate unchanged at 9.25% during its regular meeting in May of 2020, mentioning an uptick in headline inflation and an expected slowdown in growth due to the coronavirus crisis. Policymakers said the decision was consistent with achieving the inflation target of 9% (±3 percentage points) in 2020 Q4 and price stability over the medium term. The annual inflation rose to 5.9% in April from 5.1% in March, mainly pushed up by food prices, amid a combination of an unfavorable base effect linked to the Covid-19 pandemic as well as a stronger seasonal factor due to Ramadan. The Committee also disclosed that real economic growth continued to stabilize around 5.6% in the last quarter of 2019 driven by consumption. Meanwhile, short-term indicators pointed to a slowdown in economic activity in March and April. The overnight lending rate and the discount rate were also kept steady at 10.25% and 9.75%, respectively.
Published on 2020-05-14

Egypt Holds Key Interest Rate at 9.25%
The Central Bank of Egypt kept its overnight deposit rate at 9.25% during its regular meeting in April of 2020, as it would assess the impact of an emergency 300 bps cut two weeks ago as well as several measures to soften the economic effects of the coronavirus outbreak. Policymakers said that the decision remains consistent with achieving the inflation target of 9% (±3%) in Q4 2020 and price stability over the medium term. The Committee pointed to several downside risks to both inflation and economic growth in the coming months, including the coronavirus outbreak and lower oil prices. The overnight lending rate also remained unchanged at 10.25%.
Published on 2020-04-02

Egypt Cuts Interest Rates by 300bps
The Central Bank of Egypt slashed its overnight deposit rate by 300bps to 9.25 percent during an unscheduled meeting on March 16th, bringing borrowing costs to the lowest level since early 2016. The overnight lending rate was also lowered by the same margin to 10.25 percent. The dramatic move came amid policymakers' efforts to support the economy in the wake of the COVID-19 outbreak, and as the inflation outlook remains consistent with achieving the inflation target of 9 percent (±3 percentage points) in 2020 Q4. The central bank also pledged to adjust its stance again if necessary as the economy is particularly vulnerable to the virus crisis due to its large tourism sector.
Published on 2020-03-16

Egypt Leaves Monetary Policy Unchanged
The Central Bank of Egypt held its overnight deposit rate at 12.25 percent during its February meeting, as widely expected. Policymakers said that the decision is consistent with achieving the inflation target of 9 percent (±3 percent) in the last quarter of 2020 and supporting the disinflation path over the medium-term. The Committee noted that disruptions to global economic activity following the recent coronavirus outbreak could weigh on the economic outlook. Policymakers added that they will continue to closely monitor economic developments and will take actions if necessary. The overnight lending rate and the discount rate were also kept steady at 13.25% and 12.75%, respectively.
Published on 2020-02-20

Egypt Holds Interest Rate Steady at 12.25%
The Central Bank of Egypt left its key overnight deposit rate unchanged at 12.25% during its January meeting, against market expectations of a 50 bps cut. Policymakers said that the decision is consistent with achieving the inflation target rate of 9% (+/- 3 percent) in the last quarter of 2020 and price stability over the medium term. Although the headline inflation picked up to a four-month high of 7.1% in December 2019, it remained within the target of 9% and mainly reflected the strong unfavorable base effect stemming from the reversal of transitory shock to prices of fresh vegetables in the previous year. The bank also noted that GDP growth stabilized to a preliminary estimate of 5.6% in 2019 Q3. The overnight lending rate and the discount rate were also kept steady at 13.25% and 12.75%, respectively.
Published on 2020-01-16

Egypt Cuts Interest Rate for 3rd Time to 12.25%
The Central Bank of Egypt slashed again its key overnight deposit rate by 100 bps to 12.25% during its November meeting, as widely expected. This is the third consecutive rate cut, bringing the borrowing cost to its lowest since 2016. Policymakers said the decision provides appropriate support to economic activity, while remaining consistent with achieving the inflation target of 9% (±3%) in 2020 Q4 and price stability over the medium-term, despite the expected impact of unfavorable base effects in the near-term. The annual inflation rate fell sharply to a near 14-year low of 3.1% in October 2019, pushed down by lower prices of food, namely vegetables, as well as the statistical effect of a high base last year. Policymakers also noted that economic growth stabilized to a preliminary 5.6% in Q3 2019, the highest in eleven years. The overnight lending rate and the discount rate were also cut by 100 bps to 13.25% and 12.75%, respectively.
Published on 2019-11-14

Egypt Cuts Key Interest Rate Further to 13.25%
The Central Bank of Egypt lowered its key overnight deposit rate by 100 bps to 13.25 percent during its September meeting, as expected. This is the second straight rate cut as inflation continued to decline and stocks rebounded from steep losses following anti-government protests that rocked the markets in the beginning of the week. In August, headline inflation eased to an over 6-year low of 7.5 percent from 8.8 percent in July, moving closer to the lower limit of the Bank's target range of 6-12 percent. Policymakers reiterated that the pace and magnitude of future policy rates adjustment will continue to be subject to confirmation that inflation expectations are anchored at target levels that are consistent with disinflation and price stability over the medium term. The overnight lending rate and the discount rate were also cut by 100 bps to 14.25 percent and 13.75 percent, respectively.
Published on 2019-09-26

Egypt Unexpectedly Cuts Key Interest Rate to 14.25%
The Central Bank of Egypt slashed its key overnight deposit rate by 150 bps to 14.25 percent during its August meeting, surprising markets who had forecast a smaller 100 bps cut, amid continued moderation of underlying inflationary pressures. Policymakers said the decision was consistent with achieving the inflation target of 9 percent (±3 percentage points) in 2020 Q4 and price stability over the medium term. Inflation declined significantly to 8.7 percent in July, its lowest in four years, even after the recently implemented fiscal consolidation measures, which included scaling back fuel subsidies and pushed fuel prices 16-30% higher. The bank also disclosed that economic growth picked up to 5.7 percent in Q2 2019 and 5.6 percent in fiscal year 2018/19, the highest in eleven years, according to a preliminary estimate. The overnight lending rate and the discount rate were also reduced by 150 bps to 15.25 percent and 14.75 percent, respectively.
Published on 2019-08-22

Egypt Leaves Monetary Policy Unchanged
The Central Bank of Egypt left its overnight deposit rate at 15.75 percent during its July 2019 meeting, as widely expected. Policymakers said that the decision remains consistent with achieving the inflation target range of (9.0+/-3.0%) by the end of 2020 and price stability over the medium term. The Committee noted that the annual inflation rate fell to 9.4 percent in June from 14.1 percent in May, the lowest rate in over three years, mainly due to base effects, resulting from impact of the implemented fiscal consolidation measures in June 2018, and the decline of volatile food prices. Policymakers added that will monitor all economic developments and will adjust its stance to preserve monetary stability if necessary.
Published on 2019-07-11

Egypt Holds Key Interest Rate at 15.75%
The Central Bank of Egypt held its overnight deposit rate at 15.75 percent during its May meeting despite ongoing US-China trade tensions, as policymakers are reluctant to change their monetary stance ahead of energy subsidy cuts expected next month, which are likely to boost inflation.
Published on 2019-05-23

Egypt Keeps Interest Rate Steady at 15.75%
The central bank of Egypt left its key overnight deposit rate unchanged at 15.75 percent at its March 28th 2019 meeting, as widely expected. Policymakers noted that inflation rate and core inflation rate quickened to 14.4 percent and 9.2 percent in February 2019, respectively, mainly due to prices of fresh vegetables and partly impacted by an unfavourable base effect. Meanwhile, the contribution of non-food items remained broadly contained. The central bank maintains its inflation target at 9 percent (±3 percent) on average by Q4 2020. Looking ahead, the bank added that will continue to closely monitor all economic developments and will not hesitate to adjust its stance to preserve monetary stability. The overnight lending rate and the discount rate were also kept at 16.75 percent and 16.25 percent, respectively.
Published on 2019-03-28

Egypt Cuts Key Interest Rate to 15.75%
The central bank of Egypt slashed its key overnight deposit rate by 100bps to 15.75 percent on its February 14th 2019 meeting, while markets had expected it to remain steady at 16.75 percent. Policymakers noted that inflation rate and core inflation rate ticked up to 12.7 percent and 8.6 percent in January 2019, respectively, mainly due to unfavorable base effects. This comes after inflation declined to 12% in December, and then the CBE’s first inflation target of 13 percent (±3 percent) for 2018 Q4 that was announced in May 2017 has been achieved. Also, GDP growth came stronger at 5.5% in Q4 2018 from 5.3% in Q3 2018 and unemployment fell to 8.9%, its lowest level since December 2010. In addition, incoming data suggests further moderation in inflationary pressures. The central bank maintains its inflation target at 9 percent (±3 percent) on average during Q4 2020. The overnight lending rate and the discount rate were also cut to 16.75 percent and 16.25 percent, respectively.
Published on 2019-02-14

Egypt Keeps Rates Steady
The central bank of Egypt left its key overnight deposit rate steady at 16.75 percent on December 27th 2018 as expected. Policymakers said inflation declined to 15.7 percent in November from 17.7 percent in October, due to a partial reversal of the supply shock of vegetables and a favorable base effect. The central bank set the inflation target at 9 percent (±3 percent) on average during Q4 2020, down from 13 percent (±3 percent) on average during Q4 2018 but added that exogenous factors that are outside the scope of monetary policy may lead to transitory deviations from the target. The overnight lending rate and the discount rate were also kept at 17.75 percent and 17.25 percent respectively.
Published on 2018-12-27

Egypt Leaves Rates Unchanged
The central bank of Egypt left its key overnight deposit rate steady at 16.75 percent on November 15th 2018 as expected. Policymakers said inflation in both September and October 2018 came higher than expected, mainly due to prices of fresh vegetables, although supply shocks are seen transitory. The central bank added that current policy stance remains in line with achieving single digit inflation as soon as the effects of fiscal consolidation measures dissipate. The Ministry of Finance is targeting to achieve a primary surplus of 2 percent of GDP in fiscal year 2018/19, up from a preliminary 0.2 percent in the previous year. The overnight lending rate and the discount rate were also kept at 17.75 percent and 17.25 percent respectively.
Published on 2018-11-15