20 Jun 2021

The CBE (Central Bank of Egypt) has decided in its meeting on Thursday to leave interest rates unchanged. The overnight deposit rate, overnight lending rate, main operation rate, and discount rate are 8.25%, 9.25%, 8.75%, and 8.75% respectively.

The reasons given by the CBE for this decision were that inflation has recently increased and that GDP growth has improved. The rise in inflation is partly due to an unfavourable base effect resulting from the early impact of the Covid pandemic last year, an effect which the CBE expects to continue in the short term. As for GDP growth, it reached 2.9% in 1Q21 versus 2.0% in 4Q20. This is attributed to a sustained momentum of recovery across various sectors, high consumption levels especially private consumption, and a decline in the undesirable contributions of gross domestic investments and net exports. The CBE also cited the increases in the global prices of oil, food, and other commodities as contributing to their decision. (Source: CBE (English), al-Ahram (English), Egypt Today (English), Mubasher, al-Maal, al-Dostour)