Egypt’s central bank raises rates by one point, to 21%
By the AFREEQUE newsroom, based on Tunisia Online
The Central Bank of Egypt raised its key rates by one percentage point, bringing the overnight deposit rate to 20% and the lending rate to 21%. The institution said it aims to contain inflation expectations amid inflationary risks, high economic uncertainty and the pound’s depreciation against the dollar.
The Central Bank of Egypt raised its key interest rates by one percentage point, bringing the overnight lending rate to 21%. The decision, taken by the Monetary Policy Committee, aims to anchor inflation expectations and preserve the decline in inflation, according to Tunisia Online.
The overnight deposit rate now stands at 20%, while the main operation rate and the discount rate are set at 20.5%. Each rate rose by one percentage point. This is the first increase in nearly two and a half years; the previous rise was decided on 6 March 2024.
The central bank justified its decision by citing rising inflationary risks, economic uncertainty and an unfavourable external environment. The Egyptian pound is also under pressure against the dollar, having fallen to 55.35 pounds to the dollar on 23 October, according to Tunisia Online. The decline was reported in an earlier article on the Egyptian pound against the dollar.
The decision comes after the Central Bank of Egypt held its rates at several meetings following the increase on 6 March 2024. In October, Suez Canal Bank launched a banking app for businesses.
