CBE raises key interest rates by 100 bps
Updated 8/6/2023 7:31:00 AM
Arab Finance: The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided at its meeting on August 3rd to raise key interest rates by 100 basis points (bps), according to a press release.
Accordingly, the overnight deposit rate, overnight lending rate, and the rate of the main operation have been raised to 19.25%, 20.25%, and 19.75%, respectively. The discount rate has also been raised to 19.75%.
The MPC judges decided to raise the interest rates to mitigate the inflationary pressures and control inflation expectations.
The growth of the annual rate of headline inflation in urban areas to 35.7% in June 2023, as well as the surge of the annual rate of core inflation to 41.0% in the same month, were driven by widespread increases in consumer price index (CPI) items resulted from persistent supply shocks, the release highlighted.
The committee expects inflation rates to peak in the second half (H2) of 2023 before returning to the target rates, with the support of the cumulative monetary policy tightening to date.
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