Against all odds CBE maintains interest rates unchanged

Accordingly, the overnight deposit rate, overnight lending rate, and the rate of the main operation were kept unchanged at 16.25 percent, 17.25 percent, and 16.75 percent, respectively.

The discount rate was also kept unchanged at 16.75 percent.

The MPC said that its decision aims to leave room for assessing the impact of the previously implemented front-loaded tightening policies. It reiterated that the path of future policy rates remains a function of forecasted inflation rather than prevailing inflation rates.

The MPC added that maintaining tight monetary conditions proves to be a necessary condition to achieve the CBE’s upcoming inflation targets and price stability over the medium term.

CBE hiked the key interest rates by a total of eight percent (800 bps) over 2022 as a key tool to tame the accelerated inflation.

Egypt’s annual headline inflation hit over 24 percent in December – according to the CBE's latest readings –  the highest in almost five years.  January readings will be released by the CBE next week.