In Q4 2022 alone, the MPC raised rates by 500 bps (5%), with a total 800 bps (8%) rise throughout the year
During its first meeting of 2023, the Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) has decided to keep key interest rates as is, pointing towards uncertainty in changes of international commodity prices.
According to an official statement, the uncertainty was due to the expected global economic slowdown, the loosening of COVID-19 restrictions in China, and the Russia-Ukraine conflict.
However, the MPC also added that the US economy’s financial conditions have eased while economies using the Euro have broadly stabilized, compared to the situation during the previous MPC meeting.
Just a few days ago, the US Federal Bank raised key interest rates by a quarter percentage, stating that the record inflation spike was slowing down by “remains elevated”.
The overnight deposit rate, overnight lending rate, and the rate of the main operation were kept on hold at 16.25%, 17.25%, and 16.75%, respectively. The discount rate was also kept unchanged at 16.75%.
The committee also added that part of the decision was “in order to assess the impact of the implemented front-loaded tightening policies in a data-driven manner”.
In Q4 2022 alone, the MPC raised rates by 500 bps (5%), with a total 800 bps (8%) rise throughout the year.
Egypt’s economic activity saw a slight uptick in Q3 2022 to record 4.4% compared to Q2 2022’s 3.3%, the CBE explained in the statement.
Real GDP growth was primarily driven by the improvement in tourism, agriculture and trade, with the central bank forecasting growth to moderate during the current fiscal year compared to FY2021/2022.
The unemployment rate registered 7.4% in Q3 2022, compared to Q2’s 7.2%.
Annual urban headline inflation continued to increase, recording 21.3% in December 2022, alongside the annual core inflation which saw a climb to 24.4%.
