CBE raises key interest rates by 200 basis points

CAIRO – 21 May 2017: In a meeting held on 21 May, the Monetary Policy Committee (MPC) of the Central Bank of Egypt (CBE) decided to increase the overnight deposit and lending rates by 200 basis points from 14.75 percent to 16.75 percent, and from 15.75 percent to 17.75 percent, respectively.

This decision meets the International Monetary Fund’s (IMF) demands to hike the interest rates in order to tame the rising inflation.

Egypt’s headline inflation surged to 32.9 percent year-on-year in April, the highest in 30 years, while the monthly rate of overall price gains eased to 1.8 percent last month from 2.1 percent in March, according to state statistics body CAPMAS.

The CBE decided in November 2016 to float the local exchange rate against the U.S. dollar through the formal market. It also raised the return on overnight deposits and lending by 300 basis points, registering 14.75 percent and 15.75percent respectively.