The Central Bank of Egypt (CBE) has decided to maintain its overnight deposit rate, overnight lending rate, and the rate of the main operation at 27.25%, 28.25%, and 27.75%, respectively. The discount rate also remains unchanged at 27.75%.
The decision, announced by the Monetary Policy Committee (MPC), reflects recent global and domestic economic developments since the last meeting. Egypt’s real GDP growth slowed to 2.2% in Q1 2024 from 2.3% in the previous quarter, affected by geopolitical tensions and maritime trade disruptions impacting the services sector.
In March, raised interest rates by 6%, or 600 basis points (bps) to 27.25%, as part of a move to address inflation. At the time, the CBE said new rates would be “maintained for as long as necessary to achieve the desired disinflation course”.
Indicators for Q2 2024 suggest continued subdued economic activity. Consequently, real GDP growth is expected to slow in the financial year 2023-24 before recovering in 2024-25. Additionally, unemployment slightly declined to 6.7% in Q1 2024 from 6.9% in Q4 2023.
Globally, investors are looking at the US Federal Reserve, regarding possible rate cuts.
