The Monetary Policy Committee of the Central Bank of Egypt decided at its meeting on Thursday to keep the overnight deposit and lending rates, as well as the price of the main operation of the Central Bank at 18.25%, 19.25%. and 18.75% respectively.
The lending and discount rate was kept at 18.75%.
Al-Sisi asks international financial institutions to “understand” the situation in Egypt
The Central Bank of Egypt said in a statement that Al Arabiya.net received: “Globally, global commodity price expectations have continued to decline from those presented to the Monetary Policy Committee at its previous meetings. of each of the monetary policy constraints The decline in global energy prices helped reduce global inflationary pressures, the current inflation rate remains above target levels in the largest countries, and financial conditions in developed countries were presented to the Monetary Policy Committee at its meeting in May 2023 year, which confirms a slight decline in global economic growth forecasts.
At the local level, the growth rate of real economic activity recorded 3.9% in the fourth quarter of 2022, compared to a growth rate of 4.4% in the third quarter of the same year. Thus, in the first half of the financial year 2022/2023, a growth rate of 4.2% was recorded. Details for the fourth quarter of 2022 show that real GDP growth was driven by a positive contribution from net exports, in line with exchange rate developments. Private sector economic activity continued to largely support growth, driven by positive contributions from wholesale and retail trade, agriculture and construction.
The statement said: “Most preliminary indicators point to a slowdown in GDP growth in the first quarter of 2023. The GDP growth rate is expected to slow down during the 2022/2023 financial year compared to the previous financial year. to recover after that. Employment, the unemployment rate decreased slightly to 7.1% in the first quarter of 2023 from an average of 7.2% in the previous quarter, mainly due to an increase in the number of employees.
The annual headline and core urban inflation rates were 32.7% and 40.3% in May 2023, respectively. This is mainly due to the increase in prices for food products and prices for non-food products. Both have been affected by government decisions regarding administrative prices of goods and services, in addition to seasonal demand for some basic foodstuffs.
Current indicators, including recent inflation readings, indicate that the incoming data is in line with expectations that were presented to the Monetary Policy Committee at its meeting in May 2023. In light of the above, the committee decided to maintain the central bank’s base interest rates. without changes.
The Monetary Policy Committee said it will continue to evaluate the impact of restrictive monetary policy and its impact on the economy, based on data received in the coming period.
And she stressed that the trajectory of benchmark interest rates depends on the expected rate of inflation, not the prevailing rate of inflation.
“The Monetary Policy Committee will continue to monitor economic developments and expectations for the next phase. The Committee will not hesitate to use all available monetary policy tools, including liquidity management operations, to maintain restrictive monetary conditions to achieve inflation targets. 7 % (± 2 percentage points) on average for the fourth quarter of 2024 and 5% (± 2 percentage points) on average for the fourth quarter of 2026.
