CBE keeps interest rates steady

Updated 10/18/2024 9:26:00 AM

Arab Finance: The Central Bank of Egypt's (CBE) Monetary Policy Committee (MPC) opted to maintain its key interest rates during its meeting on October 17th, as per a statement.

The overnight deposit rate remains at 27.25%, the overnight lending rate at 28.25%, and the rate of the main operation at 27.75%.

Additionally, the discount rate stays unchanged at 27.75%.

The MPC’s decision reflects both global and domestic developments observed since its last meeting.

Globally, the tightening of monetary policies in advanced and emerging economies has contributed to a slowdown in inflation, with some central banks already cutting rates as inflation approaches target levels.

However, the global economic outlook remains clouded by potential downside risks as monetary tightening continues to suppress economic activity.

Key international commodity prices, particularly energy, remain volatile due to supply chain disruptions linked to geopolitical tensions and adverse weather conditions.

Looking ahead, domestic inflation is expected to stabilize at current levels through the end of 2024, with risks skewed to the upside due to regional tensions, elevated commodity prices, and the potential for stronger-than-expected pass-through of fiscal measures.

By the first quarter (Q1) of 2025, inflation is projected to decline as the effects of monetary tightening take hold.

The MPC emphasized that the current rates are appropriate to maintain the tight monetary stance until inflation shows a sustained decline.

The Committee will continue to assess inflation dynamics and adjust its policy accordingly, using all available tools to support disinflation and price stability in the medium term.