The Central Bank of Egypt (CBE) said that raising the interest rate that went up by three percent came after global commodity price expectations declined slightly.
This is compared to the expectations presented to the Monetary Policy Committee at its previous meeting.
Many central banks abroad have now signaled that inflation rates may have peaked and begun to decline.
The Monetary Policy Committee of the Central Bank of Egypt has raised the overnight deposit rate, overnight lending rate, and the rate of the main operation to 16.25 percent, 17.25 percent, and 16.75 percent, respectively.
While, the discount rate was also raised by 300 basis points to 16.75 percent.
At the local level, preliminary data indicated a recovery in economic activity during the third quarter of 2022, as the real GDP recorded a growth rate of 4.4 percent, compared to an average of 3.3 percent during the second quarter of 2022, thanks to the positive contributions of the agriculture, wholesale and retail trade sectors, and tourism.
In addition, most of the preliminary indicators continued to record positive growth rates during the fourth quarter of 2022, according to the Central Bank’s statement.
For the labor market, the unemployment rate recorded 7.4 percent during the third quarter of 2022, compared to an average of 7.2 percent during the second quarter of 2022.
The annual rate of general urban inflation continued to rise further during the fourth quarter of 2022, recording 18.7 percent in November 2022, the highest rate since December 2017.
Likewise, the annual rate of core inflation continued to rise for more than a year, to record 21.5 percent in November, the highest rate since November 2017.
Inflation rose in November due to the depreciation of the Egyptian pound in October 2022, as well as the increase in the money supply, and the continuing negative effects resulting from the outbreak of the Russian-Ukrainian war.
The annual inflation rate of food commodities has been mainly driven by the increase in the inflation rate of basic food commodities since the beginning of 2022.