Egypt's Central Bank keeps key interest rates unchanged
Cairo, 24 Sep (KUNA) -- The Monetary Policy Committee of the Central Bank of Egypt decided on Thursday to keep the overnight deposit and lending rates and the main operation rate at 19.50 percent, 20.50 percent, and 19.50 percent, respectively, while maintaining the discount and rediscount rates at 19.50 percent.
The bank stated in a statement that the decision comes in light of the committee's assessment of the latest inflation developments and forecasts, as well as changes in the surrounding risks.
It added that the annual general inflation rate witnessed a slight decline to record 14.5 percent in August, driven by a decrease in food goods inflation, while the annual core inflation rate remained relatively stable at 14.9 percent.
The bank noted that annual price developments reflect the continued downward trend in inflation, supported by broad-based stability in the components of the Consumer Price Index basket over the past three months.
It clarified that the latest inflation developments were more positive than expected, prompting the central bank to lower its inflation forecasts compared to the Monetary Policy Committee meeting in August.
The bank projected that the annual general inflation rate would stabilize during the third quarter of the current year before gradually declining to the target of 7 percent, plus or minus two percentage points, during the second half of 2027.
It indicated that lowering inflation forecasts would strengthen the current monetary conditions, which are characterized by sufficient restraint, thereby supporting the expected downward path of inflation.
Conversely, the bank noted that the risk balance surrounding inflation forecasts still leans toward the upside, reflecting the resurgence of regional hostilities. It explained that these risks could affect domestic inflation through the transmission of the impact of fiscal consolidation measures and higher-than-expected increases in global food prices, particularly if global energy prices remain elevated for an extended period.
The committee affirmed that the current level of monetary tightening provides room to mitigate the aforementioned risks and maintain the expected downward path of inflation, while emphasizing its continued assessment of monetary conditions and economic developments affecting the expected inflation path and the surrounding risks.
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