Today, Thursday, the Central Bank of Egypt fixed interest rates at 11.25 percent for deposits and 12.25 percent for lending, during its fourth meeting in 2022, in an attempt to monitor developments in “inflation” figures.
The Central Bank of Egypt, in an extraordinary meeting in March, raised interest rates by 1 percent in an effort to absorb the wave of inflation, and in order to attract foreign investments in dollars for government debt instruments, after billions of dollars came out after the Russian-Ukrainian crisis.
Then, in May, it raised interest rates by 2 percent to contain inflationary pressures.
And the Egyptian Finance Minister, Mohamed Maait, told Al-Sharq channel in an interview earlier this week that “each increase of 100 basis points affects the state’s general budget by 30 billion pounds.”
The Finance Minister expressed his concern to Bloomberg earlier this week about further interest rate hikes by the Central Bank of Egypt, adding, “I hope we will let the Egyptian economy grow, as the high cost of financing will be a problem.”
In recent months, inflation figures in Egypt have exceeded the target set by the Central Bank of Egypt of 7 percent until the end 2022.
Inflation in Egyptian cities increased to 13.5 percent in May on an annual basis, compared to 13.1 percent in April, on a monthly basis.
A report by Standard & Poor’s this week warned that the credit ratings of a number of countries were affected by the interest rate hike, which it said was hurting their already fragile financial conditions, and that Egypt, Ukraine, Brazil and Ghana are among the most vulnerable emerging markets.