The Central Bank of Egypt’s Monetary Policy Committee fixed interest rates during its Thursday meeting.
This is a positive move, says economist Sayed Khedr.
The bank left its lending rate at 19.25 percent and deposit rate at 18.25 percent, and 18.75 percent for the credit and discount rate and the price of the main.
The strategic goal of the decision is to maintain balance in many economic indicators in addition to stabilizing the economy, Khedr added.
Speaking exclusively to Al-Masry Al-Youm, Khedr explained that raising the interest rate was an unlikely decision given the damage it might cause to the performance of the economy and the volume of investments.
He added that the main objective of the Central Bank’s decision is to create stability in many economic indicators, especially in light of the high rate of inflation and the increase in prices recently.
Raising the interest rate is not a solution to achieve economic stability in Egypt or to overcome the current crises, he stressed, referring to the need to apply new investment and trade policies, increase the volume of exports and to depend on local production to reduce strong demand for various foreign currencies, Khedr said.
The Central Bank of Egypt’s Monetary Policy Committee, maintained the one-night deposit and lending return and the price of the main operation of the Central Bank at 16.25 percent, 17.25 percent and 16.75 percent, respectively, during its first meeting in 2023, on Thursday, February 2.
Credit and discount rate was fixed at 16.75 percent.
On March 30, the CBE raised key interest rates by two percent (200 bps) for the first time in 2023.
The CBE raised overnight deposit rate, overnight lending rate, and the rate of the main operation by 200 bps to 18.25 percent, 19.25 percent, and 18.75 percent, respectively. The discount rate was also raised by 200 bps to 18.75 percent.
Edited translation from Al-Masry Al-Youm