CBE lowers interest rates 1% for the first time since floatation

Mohamed Samir
2 Min Read

The Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided to lower the overnight deposit rate, the overnight lending rate, and the rate of the Central Bank of Egypt’s (CBE) main operation by 100 basis points to 17.75%, 18.75%, and 18.25% respectively. The discount rate was also reduced by 100 basis points to 18.25%. According to a statement issued by the CBE on Thursday.
Moreover, the interest rate cut is the result of the containment of inflationary pressures, as annual headline and core inflation rates declined in January 2018 to record 17.1% and 14.4% respectively, dropping from a peak of 33%, and 35.3% respectively in July 2017.
On the other hand, Egypt’s real GDP growth continued to improve for the fifth consecutive quarter to record 5.3% in December 2017, and 5.0% during 2017, marking the highest economic growth on record since 2010.

According to the statement, the MPC decision to reduce key policy rates by 100 basis points remains consistent with tight real monetary conditions, which remains a mandatory requirement to achieve the CBE’s inflation target of 13% (±3 percent) in Q4 2018.
This the first interest rate cut by the CBE since the pound floatation in November 2016, as the CBE has previously raised the interest rates by 200 basis points in May 2017, and by another 200 basis points in June 2017.

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Mohamed Samir Khedr is an economic and political journalist, analyst, and editor specializing in geopolitical conflicts in the Middle East, Africa, and the Eastern Mediterranean. For the past decade, he has covered Egypt's and the MENA region's financial, business, and geopolitical updates. Currently, he is the Executive Editor of the Daily News Egypt, where he leads a team of journalists in producing high-quality, in-depth reporting and analysis on the region's most pressing issues. His work has been featured in leading international publications. Samir is a highly respected expert on the Middle East and Africa, and his insights are regularly sought by policymakers, academics, and business leaders. He is a passionate advocate for independent journalism and a strong believer in the power of storytelling to inform and inspire. Twitter: https://twitter.com/Moh_S_Khedr LinkedIn: https://www.linkedin.com/in/mohamed-samir-khedr/
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