Central Bank of Egypt stabilizes interest rates at current levels

The Monetary Policy Committee of the Central Bank of Egypt issued a decision to stabilize interest rates at their current levels, at the end of its session held on Thursday. Under this decision, the overnight deposit rate remains at 19%, while the lending rate continues at 20%. The central bank's monetary policy relies on the use of the interest rate instrument as the primary mechanism to control inflation levels, which is defined as the rise in the prices of goods and services in The economy. The bank cuts interest rates when inflation is low, while raising them if inflationary pressures escalate. At its extraordinary meeting on March 6, 2024, the Monetary Policy Committee made a radical decision to raise interest rates significantly. Overnight deposit and lending rates were raised by 600 basis points to 27.25% and28.25%, respectively. The exceptional decision also included raising the price of the operation of the Central Bank to 27.75%, in addition to increasing the credit and discount rates by the same amount to reach 27.75%. Those extraordinary measures came as part of a comprehensive strategy to address economic challenges and ensure monetary stability.