The Monetary Policy Committee of the Central Bank of Egypt decided in its meeting on Thursday to maintain the overnight deposit and lending rates and the Central Bank’s main operation rate at 27.25 percent, 28.25 percent and 27.75 percent respectively.
The CBE also decided to maintain the credit and discount rate at 27.75 percent.
This decision reflects the latest developments and expectations at the global and local levels since the previous meeting of the Monetary Policy Committee.
The bank said in a statement on Thursday that “despite the increased expectations of a decline in global commodity prices, especially energy, the upside risks surrounding inflation remain, as commodity prices remain vulnerable to supply shocks such as global turmoil and bad weather conditions.”
The statement continued: “On the local side, preliminary indicators for the third quarter of 2024 show real GDP growth at a faster pace than the 2.4 percent recorded during the second quarter of the same year.”
It pointed out that, “Economic activity expectations for the fourth quarter of 2024 indicate a continuation of its upward trend, although it has not yet reached its maximum capacity, which supports the downward path of inflation in the short term, and it is expected to recover by the fiscal year 2024/2025.”
The statement continued, “With regard to the unemployment rate, it witnessed a slight increase to 6.7 percent during the third quarter of 2024 compared to 6.5 percent during the second quarter of the same year, as the pace of job creation did not keep pace with the growth rates of expatriates entering the labor market.”
It added: “Annual headline inflation remained broadly stable for the third consecutive month, at 26.5 percent in October 2024, driven mainly by higher prices of administratively defined non-food items such as liquefied petroleum gas (butane cylinders) and medicines.”
The statement said, “These results, along with the slowdown in monthly inflation rates, indicate an improvement in inflation expectations and its continued downward trajectory, despite being affected by fiscal consolidation measures.”
It pointed out that in light of regional and global developments, the Committee believes that keeping the CBE’s basic interest rates unchanged is appropriate until a tangible and sustainable decline in the inflation rate is achieved.
Edited translation from Al-Masry Al-Youm
