CAIRO: As anticipated, Egypt’s central bank maintained its overnight interest rates on Thursday, stating that although inflation was predicted to drop significantly in early 2025, it was still high. In a statement, the bank’s monetary policy committee maintained the lending rate at 28.25 percent and the deposit rate at 27.25 percent. Twelve analysts surveyed by Reuters all agreed that the committee will maintain current rates.
Following a record high of 38.0 percent in September 2023, headline inflation in Egypt has been declining, falling to 25.5 percent in November, its lowest level since December 2022. “As the combined effects of monetary policy tightening and the favorable base effect materialize, inflation is projected to ease substantially in 2025, with a notable decline in Q1 2025 and convergence to single digits by H2 2026,” the statement read.
It further stated that economic growth sped up from 2.4 percent in the second quarter of 2024 to 2.4 percent in the second half, based on leading signs. “Until a substantial and long-term drop in inflation is accomplished and expectations are firmly anchored, the committee believes that the current policy rates are still appropriate to maintain a tight monetary stance,” the statement read.
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