Egypt CB keeps in­ter­est rates on hold

The Gulf Today - Business - - Front Page -

CAIRO: Egypt’s cen­tral bank left its main in­ter­est rates un­changed on Thurs­day at a meet­ing of its mone­tary pol­icy com­mit­tee, it said in a state­ment.

The bank has raised key in­ter­est rates by a to­tal of 700 ba­sis points since it floated the pound in Novem­ber as part of a $12 bil­lion In­ter­na­tional Mone­tary Fund loan pro­gramme aimed at boost­ing the econ­omy.

Egypt should get a $2 bil­lion IMF loan pay­ment af­ter a sec­ond re­view by the Fund at the year’s end.

It kept the overnight de­posit rate at 18.75 per­cent and the overnight lend­ing rate at 19.75 per­cent, in line with the views of 10 out of 12 econ­o­mists polled by Reuters this week.

“The tight­en­ing cy­cle has come to an end, in our view, for now. We do not ex­pect, how­ever, a cut just yet in cor­ri­dor in­ter­est rates,” said Re­ham El De­soki, se­nior econ­o­mist at re­gional in­vest­ment bank Arqaam Cap­i­tal.

In­fla­tion dipped in Au­gust from a multi-decade high hit in July af­ter a hike in en­ergy prices as the gov­ern­ment sought to nar­row its gap­ing bud­get gap.

An­nual ur­ban con­sumer price in­fla­tion dropped to 31.9 per­cent year-on-year in Au­gust from 33.0 per­cent in July.

Core in­fla­tion, which strips out volatile items like food, de­creased to 34.86 per­cent from 35.26 per­cent, ac­cord­ing to the cen­tral bank.

“In­fla­tion in Au­gust was mainly driven by an up­ward ad­just­ment of reg­u­lated prices due to higher elec­tric­ity tar­iffs, as well as by the in­crease in prices of fresh veg­eta­bles,” the bank said.

The pound traded around 17.63 pounds to the dol­lar on Thurs­day. It has strength­ened marginally in re­cent weeks af­ter hov­er­ing around 18 pounds just af­ter the cur­rency was floated.

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