CBE keeps interest rates unchanged

CAIRO – 17 August 2017: The Central Bank of Egypt’s (CBE) Monetary Policy Committee decided to keep interest rates on hold.

In a late Thursday meeting, the committee kept the overnight deposit and lending rates at 18.75 to 19.75 percent, respectively.

The CBE said in a statement that July’s annual inflation increased to 33 percenr, frp, 29.8 percent in June “as expected”.

The move matched forecasts of economic analysts. HC Securities said in a Wednesday note that the current interest rates will remain stable to benefit from them until inflation rates return to normal levels in September.

“We expect the latest interest rate to have a limited impact on mitigating inflation, which we expect to go back to normal levels in September,” senior economist at HC Securities Sara Saada noted.

Pharos Holding’s economist Ramy Oraby also said in a note that there is no need to impose higher rates in light of July’s inflation.

In early July, the CBE decided to raise interest rates by two percent in a surprise move aimed to tame inflation, which is expected to rise over the coming period after slashing fuel and electricity subsides and following a one percent increase in the Value Added Tax (VAT).