The Egyptian Central Bank decides to keep interest rates unchanged

2023-06-22 18:19:00

Egyptian Central Bank

Egyptian Central

The credit and discount rate was kept at 18.75%.

Dubai – Al Arabiya.net

Posted on: June 22, 2023: 10:19 PM GST Last updated: June 22, 2023: 11:03 PM GST

The Monetary Policy Committee of the Central Bank of Egypt decided, in its meeting today, Thursday, to keep the rates of the overnight deposit and lending return and the price of the main operation of the Central Bank at the level of 18.25%, 19.25% and 18.75%, respectively.

The credit and discount rate was kept at 18.75%.

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The Central Bank of Egypt said in a statement that Al Arabiya.net received a copy of, “On a global level, global commodity price expectations continued to decline compared to the expectations that were presented to the Monetary Policy Committee during its previous meetings. Despite the contribution of each of the monetary policy restrictions The decline in global energy prices has contributed to reducing global inflationary pressures, the current inflation levels remain higher than the targeted levels in the major economies, and the financial conditions of the advanced economies witnessed some constraint compared to what was presented to the Monetary Policy Committee at its meeting in May 2023, which supports a slight decline in global economic growth forecasts.

At the local level, the growth rate of real economic activity recorded 3.9% during the fourth quarter of 2022, compared to a growth rate of 4.4% during the third quarter of the same year. Thus, the first half of the fiscal year 2022/2023 recorded a growth rate of 4.2%. Detailed data for the fourth quarter of 2022 show that real GDP growth was driven by the positive contribution of net exports, in line with exchange rate developments. The economic activity of the private sector continued to mainly support growth, driven by the positive contributions of the wholesale and retail trade, agriculture, and construction sectors.

The statement stated, “Most of the preliminary indicators indicate a slowdown in the GDP growth rate during the first quarter of 2023. It is expected that the GDP growth rate will slow down during the fiscal year 2022/2023 compared to the previous fiscal year, to recover after that.” Employment, the unemployment rate decreased slightly to 7.1% during the first quarter of 2023, compared to an average of 7.2% during the previous quarter, mainly due to the increase in the number of workers.

The annual general and core urban inflation rates were 32.7% and 40.3% in May 2023, respectively. This is mainly due to the rise in the prices of food commodities and the prices of non-food commodities. Both were affected by government decisions regarding the prices of administratively determined goods and services, in addition to the seasonal demand for some basic food commodities.

The current indicators, including recent inflation indicators, indicate that the incoming data is consistent with the expectations that were presented to the Monetary Policy Committee during its May 2023 meeting. In light of the above, the committee decided to keep the central bank’s basic interest rates unchanged.

The Monetary Policy Committee stated that it will continue to assess the impact of the restrictive monetary policy that was taken and its impact on the economy, according to the data received during the coming period.

And she stressed that the path of the basic interest rates depends on the expected inflation rates and not the prevailing inflation rates.

“The Monetary Policy Committee will continue to monitor economic developments and expectations in the next stage. The Committee will not hesitate to use all available monetary policy tools, including liquidity management operations, with the aim of maintaining restrictive monetary conditions to achieve the target inflation rates of 7% (± 2 percentage points). ) on average during the fourth quarter of 2024 and 5% (± 2 percentage points) on average during the fourth quarter of 2026.