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The Central Bank of Egypt raises interest rates by 200 basis points in an exceptional meeting

Today, Thursday, the Central Bank of Egypt announced the interest rate hike in the decision of the Monetary Policy Committee in an extraordinary meeting, in which raised the rates on sight deposits and loans and the price of the main operation of the Central Bank by 200 basis points to reach 13.25%, 14.25% and 13.75% respectively.

The Central Bank of Egypt has decided to increase the interest rate (credit and discount) by 200 basis points to reach 13.75%.

The central bank said, in a statement on your site webthat the objective of raising interest rates is to contain inflationary pressures caused by the demand side, the high growth rate of domestic liquidity, inflationary expectations and the secondary effects of supply shocks.

He added that rising global and local prices should lead to a 2 percentage point increase in the general inflation rate in media during the fourth quarter of 2022, above the central bank’s 7% target.

The Monetary Policy Committee confirmed that it will continue to announce the target inflation rates, started in 2017, in in line with the targeted downward path of inflation rates, and the inflation targeting policy has succeeded in reducing inflation rates until the emergence of recent global shocks.

He stressed that achieving low and stable inflation rates in the medium term supports the citizen’s real income and preserves the competitive gains of the Egyptian economy.

The CBE said it will closely monitor all economic developments and will not hesitate to use all its monetary instruments to achieve the goal of price stability.

The Central Bank of Egypt said it has taken reform measures to ensure macroeconomic stability and achieve sustainable and global economic growth.

He added that this would allow the Central Bank of Egypt to work to create and maintain sufficient levels of international reserves.

The Central Bank has declared that it will gradually cancel the instructions given on February 13, 2022, in on the use of documentary credits in import financing transactions, until its complete cancellation in December 2022 is completed, and this constitutes an incentive to support economic activity in the medium term.

The Central Bank of Egypt will also work on the construction and development of the financial derivatives market in order to deepen the foreign exchange market and increase liquidity levels in foreign currency.

Read more: The Egyptian “central”: we are working on an index for the pound sterling against currencies and gold

The Central Bank of Egypt explained that this is happening in light of the global economy facing many shocks and challenges it has not seen in years, as global markets have recently been exposed to the spread of the Corona pandemic and closing policies. , followed by the Russian-Ukrainian conflict, which had serious economic repercussions, caused pressure on the Egyptian economy, which had to face a withdrawal from the capital of foreign investors, as well as an increase in the prices of materials. prime.

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