The Central Bank of Egypt decided to keep overnight interest rates unchanged in its latest Monetary Policy Committee meeting, despite a slowdown in economic growth. Despite higher inflation in non-food commodities, the decline in food commodity inflation offset this increase. This decision was expected, given the current economic conditions.
The committee left the overnight lending rate at 28.25 percent and the overnight deposit rate at 27.25 percent unchanged, in line with expectations. The meeting was the first since Egypt signed a financial support agreement with the International Monetary Fund in March, which resulted in a significant increase in interest rates.
Inflation in Egyptian cities remains high at 32.5 percent as of April, although it has decreased from a record high of 38 percent last September. The committee expects inflation to further moderate throughout 2024 as inflationary pressures ease.
Despite the economic slowdown, Egypt raised interest rates earlier in the year as part of its agreement with the IMF. The country allowed its currency to depreciate below 50 to the dollar after fixing it at 30.85 for a year. The decision to hold interest rates steady was expected and reflects ongoing economic challenges facing Egypt.
