The Central Bank of Egypt’s Monetary Policy Committee fixed the interest rate for the ninth time in a row, and for the eighth time during 2021, saying its decision was to help stabilize inflation rates at current targeted levels.
In a statement issued by the Central Bank, the financial regulator said it had decided to keep the overnight deposit and lending rate at 8.25%, 9.25% and 8.75% respectively, and to maintain the credit and discount rate at 8.75%.
In November 2020, the committee decided to reduce both the overnight deposit and lending rates by 50 basis points to the current rates, which it has continued to fix since then.
The committee further considered that the real return on interest rates is still attractive to foreigners to invest in government debt instruments.
Analysts believe that the drop in inflation rates in November to below expectations gave monetary policy makers a breathing space, as they face no pressure to introduce any changes for the time being.
This comes in conjunction with the state of ongoing uncertainty related to possible implications of Covid19’s Omicron mutation on the economic outlook.
The Central Statistics Agency in Egypt had said in early December that the total annual inflation rate in Egypt had recorded a slight decrease on an annual basis, registering 6.2% for the month of November, compared to about 6.3% a year earlier.
However, according to data published by the Central Bank of Egypt, the annual rate of core inflation witnessed a monthly increase in November to 5.8%, up from 5.2% in October 2021.
