- Egypt's central bank is expected to keep its overnight deposit and lending rates unchanged at a monetary policy meeting on Thursday as part of its efforts to control inflation, a Reuters poll of analysts showed.
- On May 23, the Central Bank decided to fix its basic interest rates at 27.25% for deposits, 28.25% for lending, and 27.75% for the main operation rate and the credit and discount rate, which is the level those rates reached on March 6, when the Central Bank decided to raise them in an extraordinary meeting by 6% at once, bringing the total increases since the beginning of this year to 8%.
- The average forecast in the poll of 18 analysts indicated that the Central Bank of Egypt would keep interest rates unchanged, while one analyst expected it to be cut by 100 basis points.
- “We expect the central bank to keep interest rates on hold, given that inflation remains well above the upper end of the target range,” said James Swanston of Capital Economics.
- “Given the improved transparency since the policy shift in March, we will be watching for any future signals on when to consider a rate cut in light of the decline in inflation,” he added.
- “In order to achieve policy credibility, rebuild confidence in the currency and lower inflation expectations, monetary policy needs to continue to tighten,” said Simon Williams of HSBC. “It is too early to cut rates at this time.”
