The Central Bank of Egypt’s Monetary Policy Committee (MPC) is scheduled to hold its seventh regular meeting of the year on Thursday. The purpose of the meeting is to determine the bank’s basic interest rates, which serve as the primary indicator of the pound’s short-term interest rate direction.
The meeting comes amid divergent expectations from investment banks and local experts about the expected decision, considering the rising inflation rates and the CBE’s efforts to curb them, as well as the adverse impact of higher interest rates on economic activity, lending, and various sectors.
In its previous meeting on 21 September 2023, the committee decided to keep the CBE’s basic interest rates unchanged at 19.25% for deposits, 20.25% for lending, and 19.75% for credit, discounts, and the CBE’s main operation. These rates are expected to remain at their current high levels.
The committee stated that it will continue to evaluate the effect of the tight monetary policy measures on the economy, based on the data received in the upcoming period. It also noted that the future course of the basic interest rates depends on the projected inflation rates, not the current inflation rates.
The committee affirmed that it will monitor economic developments and expectations in the coming period and will not hesitate to use all available monetary policy tools to maintain tight monetary conditions, to achieve the targeted inflation rates of 7% (±2%) on average in the fourth quarter of 2024 and 5% (±2%) on average in the fourth quarter of 2026.
