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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

Egypt Leaves Key Rate Unchanged at 16.75%
The Central Bank of Egypt kept its key overnight deposit rate steady at 16.75 percent on September 27th 2018, as widely expected. The lending rate and the discount rate were also left on hold at 17.75 percent and 17.25 percent, respectively. Policymakers said that the inflation trajectory continues to be in line with its target range set in May 2017, namely 13 percent (±3 percent) in 2018 Q4 and single digits after the temporary effect of fiscal supply shocks dissipates. It was noted that annual inflation rose to 14.2 percent in August 2018 from 11.4 percent in May 2018, while annual core inflation increased slightly to 8.8 percent in August 2018, reflecting upward adjustments of regulated prices and higher prices of fresh fruits and vegetables. On the other hand, the bank underscored that economic growth was strong at 5.4 percent in Q2 and the impact of turbulence in emerging markets on domestic inflation remained contained.
Published on 2018-09-27

Egypt Leaves Key Policy Rate on Hold in August
The Central Bank of Egypt kept its key overnight deposit rate steady at 16.75 percent on August 16th 2018, as widely expected. Policymakers said the decision remains consistent with achieving the inflation target of 13 percent (+/- 3 percent), and single digit inflation is expected to be reached after the temporary effect of fiscal supply shocks fades. The annual inflation rate eased to 13.5 percent in July 2018 from 14.0 percent in June when cuts to energy subsidies imposed under an IMF loan deal hit the economy. Meanwhile, it was noted that core inflation fell for the twelfth consecutive month to record 8.5 percent in July, the lowest rate in more than two years. The Committee is aware that global conditions continue to tighten and trade tensions rose, putting pressure on currencies of emerging markets. The bank also left its overnight lending rate and the discount rate steady at 17.75 percent and 17.25 percent respectively.
Published on 2018-08-16

Egypt Holds Interest Rate Steady at 16.75%
The Central Bank of Egypt left its key overnight deposit rate steady at 16.75 percent on June 28th 2018, as widely expected. Policymakers said that the decision is consistent with achieving the inflation target rate of 13 percent (+/- 3 percent). The annual inflation rate fell to 11.5 percent in May from 13.1 percent in April, a single digit inflation is projected to be reached after the supply shock temporary effect dissipates. The Committee noted upward pressure on the magnitude of domestic fiscal consolidation due to higher oil prices and financial conditions tightened. Fiscal consolidation measures are expected to rise inflation rates temporary. The Central Bank also left its overnight lending rate and the discount rate steady at 17.75 percent and 17.25 percent respectively.
Published on 2018-06-28

Egypt Holds Interest Rate Steady at 16.75%
The Central Bank of Egypt left its key overnight deposit rate unchanged at 16.75 percent on May 17th 2018, surprising markets who expected a 100 bps cut. Policymakers said that the decision is consistent with achieving the inflation target rate of 13 percent (+/- 3 percent) in the last quarter of 2018 and single digits thereafter. The annual inflation rate declined to 13.1 percent in April from 13.3 percent in March, remaining the lowest since May of 2016. The Central Bank also left its overnight lending rate and the discount rate steady at 17.75 percent and 17.25 percent respectively.
Published on 2018-05-17

Egypt Cuts Key Rate to 16.75%
The Central Bank of Egypt cut its key overnight deposit rate by 100bps to 16.75 percent on March 29th 2018, matching market expectations. It is the second straight rate cut as the inflation continues to decline. In February, the inflation went down to 14.4 percent from 17.1 percent in January, reaching the lowest since October of 2016. Policymakers added that the move is consistent with tight monetary conditions and with achieving the inflation target of 13 percent (±3 percent) in the last quarter of 2018 and single digits thereafter. The overnight lending rate and the discount rate were also lowered by 100bps to 17.75 percent and 17.25 percent respectively.
Published on 2018-03-29

Egypt Cuts Key Rate to 17.75%
The central bank of Egypt cut its benchmark overnight deposit rate by 100bps to 17.75 percent on February 15th 2018, in line with market expectations, saying tight monetary conditions have contained inflationary pressures. Yet, annual inflation fell for the sixth consecutive month to 17.1 percent in January, the lowest since October of 2016. Policymakers target inflation at 13 percent by the end of 2018 and at single digits thereafter. The overnight lending rate and the discount rate were also cut by 100bps to 18.75 percent and 18.25 percent respectively.
Published on 2018-02-15