The Clap
The monetary policy committee (MPC) held a “special” meeting today, where it decided to raise its key policy rates by 1%.
The overnight deposit rate, overnight lending rate, & the rate of the main operation were raised by 1% to 9.25%, 10.25%, and 9.75%, respectively. The discount rate was also raised by 1% to 9.75%.
The MPC raised interest rates to tame rising inflation, which the CBE attributed to supply chain disruptions, the world recovering from the pandemic, & the Russia-Ukraine crisis.
The MPC also believes that exchange rate flexibility is a must to “act as a shock absorber”. USD/EGP is at 17.77 at the time this article was last updated.
Moving forward, the MPC will continue monitoring economic developments, & has made it clear that raising/lowering interest rates is based on inflation forecasts.
For the MPC’s full press release, click here.
