President Sisi reviews interest rate hike, exchange rate

CAIRO – 8 July 2017: The Central Bank of Egypt’s (CBE) decision to raise interest rates aimed to alleviate the impact of price hikes on citizens and preserve the purchasing power of the Egyptian pound, Presidential spokesman Alaa Yousef said on Saturday.

Yousef’s comments came after President Abdel-Fatah al-Sisi’s meeting with the Prime Minister, CBE governor and a number of ministers on Saturday.

In a surprise move on Thursday, the CBE hiked the overnight deposit rate to 18.75 percent from 16.75 percent and the overnight lending rate to 19.75 from 17.75 percent.

The meeting reviewed the latest developments of the Egyptian pound’s exchange rate, where it was confirmed that the strengthening of the pound against the dollar last week came on the back of supply and demand forces, without any interference from the CBE.
This is considered as a good indicator for an increasing confidence in the Egyptian economy and means that the government’s economic policies in the recent period have been successful, which also helped in increasing foreign reserves.

Egypt's foreign reserves stood at $31.305 billion at the end of June, edging closer to pre-2011 levels of $36 billion.

The meeting also reviewed the steps taken by the government to provide the market with essential goods at prices that will be affordable to low-income citizens and to increase sales outlets across governorates.

President Sisi has directed the government to sufficiently provide the market with essential foodstuffs in addition to tightening controls on the market and prices to help alleviate burdens on citizens.