CBE lowers interest rates 1% as inflation plummets

CAIRO – 15 February 2018:The Central Bank of Egypt lowered interest rates 1% as the inflation rates keeps going downhill, for the first time since the November Flotation.

On Thursday, the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) discussed the interest rates.

Last week, Capital Economics expected a 100 BP cut of the overnight deposit rate to 17.75 percent, adding that there is a risk that the Monetary Policy Committee (MPC) will cut rates by more than this percentage.

The Capital Economics’ report clarified that meeting MPC’s target should pave the way for the overnight deposit rate to be cut to 13.75 percent by the end of this year, whereas the consensus expects it to fall to 14.5 percent.

It also anticipated that inflation and interest rates would fall more than expected.

Egypt’s annual inflation declined to 17 percent in January 2018, the Central Agency for Public Mobilization and Statistics (CAPMAS) stated on Thursday.

In December 2017, The Central Bank of Egypt kept its interest rates unchanged, setting the overnight deposit rate and the overnight lending rate at 18.75 percent and 19.75 percent, respectively.

The Central Bank of Egypt (CBE) floated the Egyptian pound in November 2016, as part of the government’s broader efforts to reform the business and investment climate in Egypt to attract much-needed investments to the country.