CAIRO - 2 February 2022: The Monetary Policy Committee (MPC) decided, Thursday, to keep the Central Bank of Egypt’s (CBE) interest rates unchanged during its first meeting in 2023.
The overnight deposit rate, overnight lending rate, and the rate of the main operation were kept on hold at 16.25 percent, 17.25 percent, and 16.75 percent, respectively.
The discount rate was also kept unchanged at 16.75 percent.
The MPC attributed its decision to keep the rates unchanged to the assessment of the impact of the implemented front-loaded tightening policies in a data-driven manner.
It elaborated that the rates were raised 800 bps during 2022; of which 500 bps were in 2022 Q4 alone, to counter these inflationary pressures, the MPC delivered front loaded policy rate hikes of 800 bps in the previous year.
Furthermore, the MPC decided to increase the required reserve ratio by 400 bps in September 2022.
The pre-emptive tightening policy response aims to anchor inflation expectations at the upcoming inflation target of 7 percent (± 2 percentage points) on average by 2024 Q4, it noted.
As for inflation, the annual urban headline inflation continued to increase, recording 21.3 percent in December 2022.
Moreover, the annual core inflation has been following an upward trend registering 24.4 percent in the same month.
Accordingly, the average annual headline inflation recorded 18.7 percent during 2022 Q4 compared to the preannounced target of 7 percent (±2 percentage points).
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