Cabinet: inflation rate decline, growth rise prompted CBE to cut interest rates

CAIRO- 1 September 2019: The Cabinet media center has revealed the reasons behind the Central Bank of Egypt (CBE) decision to cut the interest rate of depositing and lending by 1.5 percent to reach 14.25 percent for depositing and 15.25 for lending as of August 22 compared to 15.75 percent for depositing and 16.75 percent for lending on February 14.

In a press release Sunday, the bank said some elements led to the cut of the interest rate, the first is the reduction of inflation rate to reach 8.7 percent in July 2019 while the second is the decline of unemployment rate which reached 7.5 percent in the second quarter of 2019.

It pointed out that the real interest rate of bank deposit reflects the real returns for the persons who lend and deposit money at banks after removing the effects of the inflation to reach 5.59 percent in August 2019 against 13.2 percent in August 2017.

The statement expected improvement in the investment climate for investors and more job opportunities after the interest rate cut.

It pointed out to Bloomberg's statement in which it hailed the stability of the exchange rate and decline of inflation in Egypt.