22 Mar 2022

The CBE (Central Bank of Egypt) decided to raise interest rates by 100bps at a special unscheduled monetary policy committee meeting. The interest rate hike is aimed at containing the inflationary effects of the recent sharp rises in commodities prices due to the Russia-Ukraine conflict, as well as the lingering pandemic recovery-related inflation. The overnight deposit rate is now 9.25%, the lending rate is 10.25%, and the main operation and discount rates are both 9.75%.

The CBE also allowed the EGP to trade up to 16% lower against the USD in order to maintain foreign-currency liquidity. This comes in light of some external funding imbalances that are partly related to rising risk-off sentiment resulting from the Russia-Ukraine conflict. The CBE maintains the view that the EGP’s exchange rate should remain flexible in order to serve as a shock absorber that maintains Egypt’s competitiveness.

(Source: Central Bank of Egypt (English) (Arabic), Reuters (English), AP News (English), Xinhua (English), al-Ahram (English), Egypt Today (English), Daily News Egypt (English), Egypt Independent (English), Forbes Middle East (English), al-Arabiya (English) (Arabic), al-Sharq al-Awsat (English) (Arabic), al-Maal, Amwal al-Ghad, al-Youm al-Saabe, al-Masry al-Youm, al-Watan, Akhbar al-Youm, Sada el-Balad, Masrawy, al-Sharq Business, Sky News Arabia, CNN, RT)