Central Bank of Egypt’s (CBE) Monetary Policy Committee (MPC) decided to keep the interest rates unchanged on Thursday. leaving the overnight deposit rate, overnight lending rate, and the rate of the main operation at 9.25%, 10.25%, and 9.75%, respectively. The discount rate was also kept unchanged at 9.75%.
In a press statement, MPC cited that Egypt’s annual headline urban inflation declined to 5.3% in February from 7.2% in January, supported by favourable base effect as well as contained underlying inflationary pressures. Meanwhile, annual core inflation declined to 1.9% in February from 2.7% in January, the lowest rate on record.
CBE said that the COVID-19 outbreak, as well as the associated containment measures, induce a considerable disruption to economic activity and financial markets globally. Furthermore, international oil prices witnessed a substantial decline affected by weaker demand in addition to the lack of agreement between OPEC and non-OPEC members on additional production cuts.
Earlier, CBE reduced interest rates by 300 basis points during the previous unscheduled MPC meeting on 16 March.
“The MPC closely monitors all economic developments and will not hesitate to utilize all available tools to support the recovery of economic activity, within its price stability mandate, supported by the previous macroeconomic reforms,” the statement read.