Egypt's central bank keeps interest rates unchanged

AFRICAN BUSINESS AND ECONOMYNovember 3, 2023 at 11:25 PM UTC

The Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) kept the key interest rates unchanged for the second consecutive meeting. The overnight deposit rate and the overnight lending rate will remain at 19.25% and 20.25%, respectively. Furthermore, the rate of the main operation will remain steady at 19.75%, and the discount rate will remain unchanged at 19.75%.

The press release highlighted the following global factors: Forecasts for key international commodity prices, particularly in the energy sector, have been revised upward compared to previous predictions due to increased geopolitical tensions in the region. However, global inflationary pressures have eased, thanks to tightening monetary policies in major economies and favorable base effects.

The MPC reaffirms that the path of future policy rates will be determined by projected inflation, not current inflation rates. It will continue to assess the relative significance of various risks associated with the inflation outlook.

Key Takeaways

African central banks have been following a global trend by increasing interest rates. This aligns with the actions of central banks around the world as they tighten monetary policies to attract investment to the region and combat rising inflation. The resurgence of global energy prices in the third quarter of 2023 serves as a timely reminder that the battle against inflation is far from over. While global inflation has moderated from the record highs of 2022, it remains above the 2% target that central banks in the US, the UK, and the EU typically aim for as an ideal inflation rate. This situation raises the likelihood that central banks in Africa and across the world, with particular attention on the US Federal Reserve, may maintain the current elevated interest rates for the foreseeable future.

Inflation

Egypt

Monetary policy

Interest rate