CAIRO - 22 December 2022: The Central Bank of Egypt (CBE) maintained the targeted inflation rates at an average level of 7 percent (±2 percent) during the fourth quarter of 2024.
The CBE set an average rate of 5 percent (±2 percent) for the targeted inflation rates during the fourth quarter of 2026.
This came with the CBE’s decision to raise its interest rates by 300 basis points, or 3 percent, during its last meeting in 2022.
The overnight deposit rate, overnight lending rate, and the rate of the main operation were raised to 16.25 percent, 17.25 percent, and 16.75 percent, respectively.
The discount rate was also raised to 16.75 percent.
The Monetary Policy Committee (MPC) attributed its decision to raise the rates to contain the inflationary pressures and to steer annual headline inflation rates towards its upcoming targeted levels.
The annual headline urban inflation continued to accelerate further during 2022 Q4, reaching 18.7 percent in November 2022, its highest rate since December 2017.
“Similarly, annual core inflation continued its upward trend that started over a year ago, recording 21.5 percent in November 2022, its highest rate since November 2017,” it added.
The statement noted that November’s 2022 inflation figure was mainly impacted by the depreciation of the Egyptian pound that took place in October 2022, as well as the higher broad money growth and the ongoing repercussions of the Russia-Ukraine conflict.
Since the beginning of calendar year 2022, annual food inflation has been mainly driven by core food inflation. Moreover, the annual inflation of services was mainly driven by expenditure on restaurants and cafes, while the increase in retail items was broad-based, according to the MPC.
Egypt is witnessing an inflationary wave that has been accelerating almost every month since the beginning of this year, as a result of the high costs of importing energy and food, due to the Russian-Ukrainian crisis, and the Corona epidemic crisis.
Egypt reached an agreement with the International Monetary Fund (IMF), in November, worth $3 billion. It also devalued its currency twice, in March and late October, after an exit wave of hot money on the successor to the Ukraine crisis and the US interest rate hike on the dollar.